the 4% rule

Doing one project known as the 4% rule.


assuming i start the year with 2M.
I withdraw the sum of 4% base on the principal of 2M at the start of every year.

This annuity will keep growing as i did not eat into my principal at all.

assuming average return is 6-8% for Equities.
The long term average return for pure alpha generating should be at more than 10%
my average return for the last 7 years is 14% P.A

If i base on a 6% return by the time i reach 68.

My net worth will still be 5.16M assuming a draw down of 80k every year.

if i do 8% my net worth will be 11M

if i do 10% 21M

so the effort now should be to spend time ensuring that i will juice out the 2% more Alpha than the market as i don't think i can make 5M... in 30 years time thru working.

which is 166k per year. min to 333k per year base on the 6-8% average return from the market.

hopefully this project can last.. anyway just try loh thats life mah..