Reply to What would you consider a large trust fund?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]5M - you can live off the interest[/quote]
If you're over 55 and have near zero expenses, maybe. [/quote]

C'mon you can make a couple hundred thousand in income from 5 mill.[/quote]

No you can't, at least not if you plan on living off it forever (ie, invest it fairly conservatively).
I know from experience.[/quote]

Just because you couldn't figure out how to generate a 4% annual return, doesn't mean it's not possible.  In fact, it's pretty easy even in today's low interest environment.   The 5 second method?  Close your eyes, put all $5M in VWLUX, and enjoy your low risk, tax-free, growth and distributions.

[/quote]

Thanks, very helpful.
:roll:
- pp

Not that I'm complaining AT ALL (although losing my parents young wasn't a picnic), and FWIW I do consider myself "rich" (though you wouldn't know it to look at me), but $5m inherited in your mid thirties is not, in my opinion, enough to live on forever with no additional income (obviously depending on lifestyle - of course one COULD live on it).  Responses in this thread indicate that people agree with me.  My brother and I both continue to work (he inherited the same amount).  [/quote]

Not the PP that posted the 4% comment, but I am curious how you've invested and/or how conservatively you're living if you can't create a 4% annualized return on $5mm. Some % of that should be in equities which have delivered ~8% p.a. growth over the last decade, and super high-quality core fixed income has averaged nearly 5% p.a. in the last decade.  So, even if the stock/bond mix was crazy conservative (say 25% stock, 75% bonds) the portfolio would have returned close to 6% p.a. for 10 years.  That's nearly $300K per year without touching the $5mm corpus ... even after cap gains / interest taxes, the $ return should be well over $200K per year.

$200K per year for expenses that don't include building a retirement pool seems like a well-above 'conservative' standard of living.  Which part of this math doesn't apply to your situation ... the return or the expenditures?

[/quote]

I have to look at my statements to see how much the return actually is.  I would guess it's in the 200k range, if not higher (one brokerage house just sent me a statement with 7.8%).  It's all reinvested though, so I don't see any of it (except the mandatory IRA distributions).  My point isn't that I can't / don't GET a 4% return, it is that I don't consider this amount of inheritance enough to live on long-term.  I have two very young children and there will be college and any other expenses they incur - I'm more comfortable living off of our salaries and the IRA / real estate fund distributions at this point in life.  I think that's in line with what OP was asking.[/quote]

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