Living Off Investments

Posts on living off investments, investment income, alternative income investments, dividend investing, covered call writing, strategies for living off investments, REITs, MLPs.

Scale Time Money | Difference Between Cash Flow and Capital Gains 

Difference Between Cash Flow and Capital Gains with Chart

There are two major reasons you invest; for cash flow or for capital gains. What’s the difference between cash flow and capital gains investing? Cash flow investing buys assets that generate income while capital gains investing buys assets with the expectation they will increase in value.   There are some important nuances with both cash …

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Money Sign | Retire at 55 with 2 Million 

Can You Retire at 55 with 2 Million Nowadays? (Videos and Table)

Can you retire at 55 with 2 million?  A retirement account with 2 million produces a monthly annual withdrawal of  $80,000 using a traditional 4% withdrawal rate. If you can live on $6,667 plus any other income sources, traditional retirement rules suggest that $2 million is enough to retire at 55. Your expenses, chosen retirement …

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dessert | How Much Money Do You Need to Live Off Investments

How Much Money Do You Need to Live Off Investments? [Videos+PDF]

Living off investments defines financial independence, but getting there can be challenging. How much money do you need to live off investments? Here’s the formula: Divide the desired annual income by the expected yield. If you want $10,000 monthly investment income, and expect a 5% yield, divide $120,000 by 5% for the amount of money …

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money pass computer | open in the money covered call strategy

In the Money Covered Call Strategy | Benefits and Examples

  Selling in the money covered calls can be an excellent income generating strategy for stock investors trying to live off investment income.  An in the money covered call strategy involves selling a call option with a strike price lower than the cost of the underlying stock. This strategy is commonly used when the call writer expects …

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Plan A to B | Alternative Wealth Strategies

Alternative Wealth Strategies That Worked (And Didn’t)

There are the wildly popular if not overly simplified asset allocation models of investing in stocks and bonds. Then, there are alternative wealth strategies we know the wealthy use that can seem out of reach for us normal investors.    Are they really out of reach for us individual investors? If not, which alternative wealth …

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Blocks showing growth

Beginner To Advanced Investing Strategies | What’s Best for You?

Does everything you need to know about investing really fit onto one side of a cocktail napkin as touted by more than one wildly famous financial author?   Well, the answer depends on:  Your personal wealth plan How long you have to save and invest  Your net worth How much money you need to retire …

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Woman Lightbulb | Creative Income Streams

Creative Income Streams

Creative income streams have been the saving grace for my family. I think they can be for millions of retirees willing to think and act outside the box.   In this post I’ll share what I’ve learned after testing and implementing over 15 creative income streams from investing, consulting, online business and real estate along with my husband. While I’m …

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Far Out Time

How Far Out Should You Sell Covered Calls?

  Covered calls can be an excellent income source for stock investors, but it can be confusing to select the best option expiration for the call being sold. The further out the option expiration, the higher the premium and the longer the stock has to reach the strike price. How far out you should sell …

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man over 50 looking for new ways to retire

New Ways to Retire

An exciting and promising shift is happening right now in the way we retire.   Fortunately, changes stemming from the rise of the internet now lead to rewarding retirement opportunities for those not interested in living on less while working crossword puzzles for brain stimulation in their golden years. The younger generations are living proof …

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man sailing into retirement with income streams

How to Increase Income Before Retirement [With Video Challenge Series] 

It’s stressful knowing that the consistent (and delightful!) monthly deposit into your bank account will end when you retire.  But there are many ways you can increase income before retirement to ease the abrupt end of that sweet reliable employment income. Stock dividends, covered calls, alternative investments, various real estate investments, and even consulting or online …

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Burning Franklin | How Long Will a Million Dollars Last in Retirement

How Long Will a Million Dollars Last in Retirement?

A million dollars no longer guarantees a comfortable retirement complete with cruises and luxury cars.   How long will a million dollars last in retirement?  In this post, you’ll see.   The inspiration for this article comes from working with a 55-year-old wealth coaching client who was wondering how long her million dollars would last in retirement. Let’s …

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Piggybank Compare | Wealth Building Vs Income

Wealth Building Vs Income

Wealth building and income generation are the two primary investment objectives. As such, these factors are the starting point for selecting investments.   Is it better to focus on wealth building vs. income as a primary objective? Wealth building is typically the main objective until enough wealth has been accumulated to provide for a comfortable retirement. …

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calculator pov | How to Calculate Investment Income

How to Calculate Investment Income

True financial independence is being able to live off investment income without spending down your investment capital.  Here’s how to calculate investment income: Multiply investment cost by the yield to get the amount of annual income. For example, if an investment that costs $100,000  yields 3%, investment income will be $3,000 a year.   After calculating …

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New Business | New Retirement Strategies

New Retirement Strategies

The old model of retirement no longer works for a lot of people who want to live well in retirement.  Old retirement strategies include basics like delaying social security, working longer and part time employment. But, fortunately, there are now some more innovative and lucrative retirement strategies that can be a real godsend for retirees.   Many millennials are already using some of these new retirement …

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Money Timer Flag | Alternative Wealth Solution

Alternative Wealth Solutions

Consistently saving money and investing it in stocks and bonds builds wealth over many years. The problem is that this strategy usually takes at least two decades, and most people don’t begin this discipline until it’s too late to save enough to retire comfortably.   Alternative wealth solutions exist, however, for anyone willing to think and invest outside the …

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couple toast

Fear of Retirement Boredom | 7 Cures [Videos]

For those planning to retire soon, retirement can feel scary from both a financial and a lifestyle perspective.  Fear of retirement boredom is a very legitimate reality, especially for certain personalities. Here are 7 ways to address that subtle and almost embarrassing fear that you could be bored to tears in retirement. Read my own …

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Man Whiteboard | Living Off Investment Income – Advantages and Disadvantages

Living Off Investment Income | Advantages and Disadvantages

True financial independence is reached when you can live off investment income.  Living off investment income has many advantages that often require a shift from traditional investing in stocks and bonds, but there are also a few disadvantages to living off investment income.  In this post, I’ll share and explain the 22 advantages and 6 …

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retirement key | Alternative Retirement Investment Strategies 

12 “Slightly” Alternative Retirement Investment Strategies 

  If you’re concerned that investing in traditional stocks and bonds with a common asset allocation won’t provide a comfortable retirement for life, you’re not alone. We had those same concerns over a decade ago, along with millions of other investors over 50, and here’s what we discovered: Alternative retirement investment strategies can result in higher …

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nest egg | What Net Worth Do You Need to Retire

What Net Worth Do You Need to Retire? Huge Aha

Just past midlife, many people get super focused on increasing net worth before retirement.  What net worth do you need to retire? You’ll need enough assets to allow you to cover all living expenses with retirement account withdrawals of 3% to 5%, plus any other income sources, including social security. Also, living expenses should be adjusted for …

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drive safe | Is It Safest to Withdraw or Get Investment Income

Is It Safest to Withdraw or Get Investment Income? Challenge

Updated: October 9, 2019 By definition, retirement is the time when you can live off investments. The traditional retirement model is to withdraw 4% a year from your retirement savings to live but an increasingly popular alternative is to get income from investments instead.   Is it safest to withdraw or get investment income to live in …

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ten blocks | What Will Stocks Do Over the Next 10 Years

What Will Stocks Do Over the Next 10 Years?

Updated May 6, 2020 At the end of the strong bull market of the 1990’s, a few brave financial experts predicted the next decade would not be a good one for stock investors.  What will stocks do over the next 10 years? Ray Dalio, Warren Buffett, Rob Arnott, Liz Ann Sonders and John Bogle have told us what …

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money puzzle | How Much Money Do You Need to Live Off Investments

How Much Money You Need to Live Off Investments 

Knowing how much money you need to live off investments can seem daunting but it’s really just a few steps and math.   Let’s say you want to generate $ 10,000 a month to live off investments.    We can back into the amount of money you need with the following formula:  Amount of Desired Monthly Income/Expected Yield = …

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risk blocks | reducing risk in stocks

Reducing Risk in Stocks | 13 Lessons from Past Bear Markets

After surviving a few bear markets over the past 40 years as an investor, I’ve learned many lessons from them.   Reducing risk in stocks before bear markets take full hold helps investors protect their net worth as well as have capital to invest in stocks again once unusually low valuations are reached.  This sounds almost too obvious to write, but most investors don’t take …

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couple pondering | Are Dividends or Capital Gains Better

Are Dividends or Capital Gains Better?

  You may have noticed that you’ve gotten both capital gains and dividends from investing. Or maybe you’re trying to decide if you should focus on dividends vs capital gains as a primary objective in selecting an investment.   Are dividends or capital gains better? Dividends are better for investors seeking income as a primary objective …

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money tree | 4% rule dividends

Does the 4% Rule Include Dividends?

If you’re exploring early retirement like we were well over a decade ago, you may be wondering about the income provided from the standard 4% retirement withdrawal rule. Does the 4% rule include dividends, specifically? The 4% rule can include dividends if they exist in the account since the rule is more about the amount …

Does the 4% Rule Include Dividends? Read More »

couple in retirement | when to switch from growth to income

When to Switch from Growth to Income [With Videos]

Growth investing is usually done during an investor’s high income years while income investing is usually done during retirement, but the best time to transition from growth to income can be unclear. If you’re wondering when to switch from growth to income investments, the answer depends on several factors including net worth, income sources, wealth …

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How to Buy Assets That Generate Income

If you’re approaching retirement, that anticipated time when you can live off investments or at least work fewer hours own your schedule, you’re probably transitioning to income investing. You may be wondering how to buy assets that generate income. The way you buy income generating assets depends on the type of asset you’re buying. For example, …

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man planning retirement

The Best Income Stream to Start Before Retirement

If you’re concerned about having enough income to live comfortably in retirement, you may want to start one or more income streams beforehand but you’re not sure where to start. To choose the best income stream to start before retirement, consider your desired income, eventual capital gain, acceptable risk and lifestyle. It’s easy to get …

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Problem - Solution

Problems with Covered Calls

Covered calls can be an excellent way to increase income from stocks but like all investments, covered calls aren’t perfect. The problems with covered calls include stock market risk, company specific risk, high required capital, forfeiting of potential capital gains, taxes on call income, and ongoing management of unexercised options. It is my belief, however, …

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retirement nestegg | Are covered calls a good strategy

Are Covered Calls a Good Strategy?

In this time of low dividend yields, increasing stock income by selling call options on stocks you already own sounds pretty appealing to yield hungry investors. Are covered calls a good strategy? Covered calls can be an excellent income strategy for stock investors willing to forego capital gains above the strike price should the call …

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weighing pros and cons | owning a business vs real estate

Owning a Business Vs Real Estate | What I Learned from Each

Every day more investors are using alternative strategies to generate income since the income from bonds is still relatively low. Small business and real estate are among the most popular alternative investments now given the opportunities and ease of entry for each. There are many types of small businesses and many types of real estate …

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What Are the Risks of Bonds? Chart Stocks Vs Bonds

Updated August 8, 2019 Investing in bonds definitely has risks, contrary to what many investors think. Just what are the risk of bond investments? They include interest rate risk, default risk, inflation risk, call risk and economic risk. The fact that bonds are used to offset risk from stocks, and the very long bull market …

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couple spread arms | How to Get More Income from Investments

How to Get More Income from Investments – 44 Strategies

  Investors spend most of their lives concentrating on investing for growth vs investing for income. The way to generate more income from investments, then, is to simply shift your overall objective from growth to income.  Here are  44 ways to get more income from your investments ranging from stock dividends to alternative income investments, such …

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burning dollar | Retirement Withdrawal Strategies

Retirement Withdrawal Strategies – Do They Still Work?

Have you heard that the past reliable retirement withdrawal strategies don’t work anymore? Well, there is good news, and bad news around that rumor. The good news is that retirement withdrawal strategies can work for those seeking to withdraw 1 to 4% a year from their investment accounts as a passive source of funds. The bad …

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coffee work | how to live off investments

How To Live Off Investments During Low Interest Rates

You may be wondering how to live off investments, especially in this day and age of extremely low interest rates when your investments don’t earn much income. Individuals live off investments in one of three ways: spending investment savings and it’s growth or income, spending only the income generated from investments, or living off a …

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