How much would your portfolio have to be worth to be able to "live off the interest"?

Question

Theoretically speaking. Suppose you were changing careers and needed a steady income that would at least pay the bills, say 30K/yr., until you'd made the full transition.

Answer 1

x * interest rate = income
income = 30,000
interest rate = 5.25% (CDs)
assume $30K before taxes is OK, if not figure in your tax rate
$30K/0.0525 = $571,429

Answer 2

As a rule of thumb, 5-10% return is possible, 5% is certainly more conservative and leaves a buffer for bad years.
Thus to yield 30,000 pre-tax you would need $300,000 at 10%, $600,000 at 5%.
If you were comfortable using up your capital and had say a 10 year period where the income were needed then you would need about $200,000 at 7%.

good luck

Answer 3

eight hundred thousand dollars at 5 percent would give you 40 thousand less capital gains taxes of 25 percent gives you the 30 thousand that you were looking for.Or you could buy two 4 unit housees rent seven units out at 500 a month and you live in the other unit.That would be 3500 a month times 75 percent ocupancy would be 3500 X9 months would give you 31500 before other overhead i.e. insurance maintenance taxes.You should not pay more than 40k per unit 40 X4 equal 160 times two buildings equals 320 k it is alot less than eight hundred but that is your choice.

Answer 4

I HIGHLY recommend this website. They have a retirement calculator to help you get an idea of how much money you need to have in order to realize a steady stream of income.

http://firecalc.com/calc-research.php

Answer 5

$1,000,000 at 6% interest is $60,000. Take out your taxes (lets say 25%) you take home $45,000.

Answer 6

At least one million.