Anonymous
01/13/2015 13:04
Subject: What would you consider a large trust fund?
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:5M - you can live off the interest
If you're over 55 and have near zero expenses, maybe.
C'mon you can make a couple hundred thousand in income from 5 mill.
No you can't, at least not if you plan on living off it forever (ie, invest it fairly conservatively).
I know from experience.
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.
+1
Anonymous
01/13/2015 13:03
Subject: Re:What would you consider a large trust fund?
I have a $5 million trust fund. It does spin off a couple of hundred thousand a year. But that money is not there to be spent. It is, as a pp noted, there for my children and their education some day. I think it is my obligation to continue working and providing for them. If I sat around and ate bonbons all day, there would be no real wealth left for my kids. So yes, having the trust fund is wonderful and I am very grateful. But it doesn't mean I can quit my job without basically cannibalizing my children's future.
Anonymous
01/13/2015 13:03
Subject: What would you consider a large trust fund?
Anonymous wrote:
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?
I need to be able to buy the occasional Porsche to enjoy during my retirement. That's tough to do on a $200k yearly income if I also want to travel, eat, discover the cause of the hubbub over wine and golf, and engage in a variety of other hobbies, past times, and impromptu merry making on my impulse, due to an abundance of free time.
I've decided with the missus that to achieve the above, along with consideration for all of her worldly wants and needs, we need $500k/year in today's dollars, growing with inflation or at least tracking with the price of a good pair of pants at Neiman Marcus.
Anonymous
01/13/2015 12:53
Subject: What would you consider a large trust fund?
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:5M - you can live off the interest
If you're over 55 and have near zero expenses, maybe.
C'mon you can make a couple hundred thousand in income from 5 mill.
No you can't, at least not if you plan on living off it forever (ie, invest it fairly conservatively).
I know from experience.
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.
Thanks, very helpful.
- 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).
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?
... also, I would still work also with $5mm in the bank, fwiw, but it would be for the purpose of building wealth for my kids, not because I needed it to live an upper class lifestyle.
Anonymous
01/13/2015 12:51
Subject: What would you consider a large trust fund?
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:5M - you can live off the interest
If you're over 55 and have near zero expenses, maybe.
C'mon you can make a couple hundred thousand in income from 5 mill.
No you can't, at least not if you plan on living off it forever (ie, invest it fairly conservatively).
I know from experience.
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.
Thanks, very helpful.
- 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).
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?
Anonymous
01/13/2015 10:41
Subject: What would you consider a large trust fund?
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:5M - you can live off the interest
If you're over 55 and have near zero expenses, maybe.
C'mon you can make a couple hundred thousand in income from 5 mill.
No you can't, at least not if you plan on living off it forever (ie, invest it fairly conservatively).
I know from experience.
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.
Thanks, very helpful.
- 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).
Anonymous
01/13/2015 10:29
Subject: What would you consider a large trust fund?
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:5M - you can live off the interest
If you're over 55 and have near zero expenses, maybe.
C'mon you can make a couple hundred thousand in income from 5 mill.
No you can't, at least not if you plan on living off it forever (ie, invest it fairly conservatively).
I know from experience.
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.
Anonymous
01/13/2015 10:20
Subject: What would you consider a large trust fund?
$15 million, which is also my target for retirement (in today's dollars).
At that level, I can comfortably live off the returns of a low risk investment (i.e. long term muni bond fund). And, it allows me to maintain the same lifestyle I have now but with more much travel.
At that level, I can comfortably live off the returns of a low risk investment (i.e. long term muni bond fund). And, it allows me to maintain the same lifestyle I have now but with more much travel.
Anonymous
01/13/2015 10:18
Subject: What would you consider a large trust fund?
Anonymous wrote:Anonymous wrote:Anonymous wrote:5M - you can live off the interest
If you're over 55 and have near zero expenses, maybe.
C'mon you can make a couple hundred thousand in income from 5 mill.
No you can't, at least not if you plan on living off it forever (ie, invest it fairly conservatively).
I know from experience.
Anonymous
01/13/2015 10:16
Subject: What would you consider a large trust fund?
Anonymous wrote:Anonymous wrote:Anonymous wrote:5M - you can live off the interest
If you're over 55 and have near zero expenses, maybe.
C'mon you can make a couple hundred thousand in income from 5 mill.
Show me.
Anonymous
01/13/2015 10:13
Subject: What would you consider a large trust fund?
Anything over 100k.
Anonymous
01/13/2015 10:02
Subject: What would you consider a large trust fund?
Anonymous wrote:Anonymous wrote:5M - you can live off the interest
If you're over 55 and have near zero expenses, maybe.
C'mon you can make a couple hundred thousand in income from 5 mill.
Anonymous
01/13/2015 10:02
Subject: Re:What would you consider a large trust fund?
Anything over 10 mil
Anonymous
01/13/2015 09:56
Subject: What would you consider a large trust fund?
Anonymous wrote:5M - you can live off the interest
If you're over 55 and have near zero expenses, maybe.
Anonymous
01/13/2015 09:46
Subject: Re:What would you consider a large trust fund?
$10 million.