If you inherited $1 million and wanted to live off of income from it, what/where would you invest it?

Question

Essentially I mean using it soley to provide an income, so not things such as paying off current debt or investing it for growth. Also, what is a realistic amount of interest to safely expect? Would making $80k-$100k in interest per year on the million bucks be realistic with what you are proposing?

Answer 1

I can't believe the answer you are hetting. Listen, DO NOT invest in penny stocks. Second, a 10% return in a 'safe' investment is not easy to find. The safest thing available today is a CD which, depending on how far out you are going, will get you 5 to 6 %. That's quite a distance from 10%. You will need to incorporate some risk tollerance. You can get much better returns from stocks, reits, or mutual funds. Just, be very careful.

Answer 2

I'm pretty shocked at some of the answers as well. Safely is the key word here. Interest is not at its best right now, but if you are strictly wanting to live of the interest we are currently paying 6.5%, so you could count on $65,000. That is one of the highest rates you can get in a safe investment that is guaranteed never to lose you a penny. Do not go through a broker or financial planner. You can manage your own money if you understand how simple it can be without paying a bunch of brokerage charges. It also depends on your age. If you don't mind touching the principle, then yes you can get 85K to 100K and expect it to last about 15 years. Go directly through a reputable Insurance Company for a Fixed Annuity. You could live off that interest very nicely for the rest of your life, and it would then pass to your beneficiaries without probate. Be smart, don't pay someone to invest in risky stocks, and mutual funds if you are not willing to lose in this market. We charge no fees to provide high interest and safety. Let me know if I can get you someone to help.

Answer 3

Yes, it is pretty amazing what some people here think is smart. SusanC is right.



here's a little surprise for you....

If you invest it safely at 6% you would get about $60,000/year. BUT… if you are 25 now, by the time you are 60 it will only have the buying power of $20,661/year in current dollars because of inflation. By the time you are 80, you’ll be living on 11,235. Of course, if you get social security that will help.

The older you are the better for living on the income. If you’re 35 now, by 60 it will be worth 28,000/year

So… if you’re young, see a Certified Financial Planner. Invest it and continue working while it grows for a few years.


a million dollars isn't what it used to be....

Answer 4

Part fixed income, like short term CD's right now, and moving long term when their rates get more attractive.

Secondly is dividend paying stocks. You get paid 2 ways, with profit from the company (dividends) and stock appreciation. This is banks, utilities, etc. You might want about 20% of your money in growth only stocks (stocks that pays less then 1.5%) so as to keep ahead of inflation.

Remember, it's not the raw rate of return, you need to be able to keep ahead of inflation, which is 3.5% to 4% right now.

Answer 5

Yeah, that's kinda dumb.
All you need to do is talk to Fidelity or Schwab and tell them you want to put a million dollars into a Growth and Income Fund with the proceeds sent to you and not reinvested into the fund.
You would get a check every month for about seven grand and your principal stays untouched.

I am sure that they would be way more than happy to talk to you about that.

Best of luck to you!

Answer 6

Yes you can realistically make $80K-$100K per year but I would not think in interest, it would be from income. That is only 8 - 10% per year. Not too hard to come by.

I would sell futures/options way out of the money to earn my income. You would easily make your target. :)

Answer 7

medical and hi-tech penny stocks!
get in get out within 1-6 months usually with 500% gains and you can usually get out of the losers b4 they crash!