How much would I have to have in Certificates of deposits to make $25,000 a month?

Question

This is a for real question. I have always wondered how much I would need in CD to make $25,000 a month in interest?

Could I take whatever the amount is and split into 4 parts? I mean if it was a million dollars. Could I put 250,000 in one week and then repeat it for the whole month?

Say they could be cashed in whatever amount of days. Could I withdrawl the interest out to live on? Then do it again the next week. I'd like to get something close to a weekly check?

This may sound stupid (it is) but are there ways to put a bunch of money into a account to live off of?

I want something that would be a safe as can be, to put my money in. I just figured that CD were the safest wayto go.

Any advice in this area?

Thanks,
Mike h.

Answer 1

$6 million would generate $25000 per month, but that $25000 per month would be taxable and at that income would result in about $13000 a month going to you (34.6% federal tax, plus whatever your state charges). For you to get $25000 a month that you can spend, you'd have to have closer to $10 million put in CDs.

Good luck!

Answer 2

That would be interest of $300,000 a year, and would take somewhere around $6 million in the CD's. Most CD's can be set up pay monthly. If you had that kind of money, I don't think you'd be worried about running out of money toward the end of the month, so monthly rather than weekly would probably work OK for you.

An aside - if you had $6 million, you would probably be well advised to put some of it into fixed investments and some into growth.

Answer 3

You are going to need something in the order of $6 million. If your goal is to create a stream of income off your capital to live off, you might be better off looking at an annuity or at a muni bond fund designed to throw off income. Both should provide a better return than a CD. The best course of action will be determined by your personal circumstances. This is probably a case where you should consult a financial adviser.

Answer 4

To receive $25,000 in net income every month, you would need at least US$7-8 million in CDs, probably more at current low interest rates.

Answer 5

Well, 25,000 a month is about 300,000 a year (a bit more because of your "interest on interest") so say your CD payed out 5% annually (about average) you would need $6,000,000 (300,000 / .05).