W2R
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I searched the forum, but couldn't get the answers I am looking for. Does anybody get all their current and future needs met on dividend income alone? By that I mean producing an income flow that allows money left over at the end of the month to keep up with inflation pad out the emergency fund etc.
Yes. I spend less than my dividends.
RetirementColdHardTruth said:If I was to plan that for retirement what would be some good assumptions for average div rate for a basket like a high yield dividend ETF. Just turning 40 plan on working for at least another 6-10 years. Want to use that time to see if I can build a portfolio that can create that type of stream.
I have no idea. I have 30% Wellesley (VWIAX), but otherwise my portfolio is not oriented towards high dividends. My portfolio dividend rate for 2011 was 2.73%.
RetirementColdHardTruth said:For number crunches out there lets assume my current lifestyle requires $4500 a month before tax. What sort of emergency fund would you keep on hand in cash to ride out a period wher dividends dropped and anything else you can see as a pitfall of this strategy. Lets assume that over the next 10 years I can build such a portfolio.
I think knowing that I could never outlive my mest egg is a big plus for me and would have me pulling the trigger quickly.
Look forward to you input.
I have about 2-3 years' cash in Vanguard, and every month my dividends go into that Vanguard cash. Early in January I move the entire year's spending money from Vanguard to my local bank, for convenience, and make no more withdrawals from Vanguard throughout the year. This lessens any month-to-month concerns about yield. It also gives me a better handle on how I am doing with my spending, by simply looking at my bank account.
Like some others have expressed above, I do not lose sleep over the possibility of dividends dropping. In my case, I can afford to spend more than my dividends if necessary because I am already 63. I am just not inclined to do so. Right now I don't need to spend all of my dividends, and yes, it is very reassuring to know that in all probability one would never outlive one's nestegg.
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