Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
What is your "yield"
Old 01-15-2015, 08:39 AM   #1
Dryer sheet aficionado
 
Join Date: Oct 2014
Posts: 46
What is your "yield"

I'm trying to get an idea of what a reasonable "yield" is on my investment portfolio. By that I mean income (dividend & interest) over value (not yield on cost) of your overall investment portfolio (which for me excludes emergency cash and checking account balance). Last year my yield was just below 2%. That sounds reasonable to me because I am still 10 years from our FIRE goal and I am 70/30 stocks/fixed income. I have no particular focus on dividend stocks or high income investments.

In the future, I would like to get more income from our portfolio, so I'm curious what other people have been able to achieve.

Thanks in advance.
__________________

__________________
phil70 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-15-2015, 09:06 AM   #2
Recycles dryer sheets
Sea Kayaker's Avatar
 
Join Date: Aug 2009
Location: Vancouver/Gulf Islands/Baja
Posts: 479
About 6%.
__________________

__________________
Retired at 42... the world is my oyster, and I am now in the process of shucking the hell out of it.
Sea Kayaker is offline   Reply With Quote
Old 01-15-2015, 09:30 AM   #3
Recycles dryer sheets
 
Join Date: Jul 2013
Posts: 388
Quote:
Originally Posted by phil70 View Post
I'm trying to get an idea of what a reasonable "yield" is on my investment portfolio. By that I mean income (dividend & interest) over value (not yield on cost) of your overall investment portfolio (which for me excludes emergency cash and checking account balance). Last year my yield was just below 2%. That sounds reasonable to me because I am still 10 years from our FIRE goal and I am 70/30 stocks/fixed income. I have no particular focus on dividend stocks or high income investments.
We have a standard boglehead portfolio. Looking at divs on total market equities and intermediate bond funds, something near 2% is to be expected.

Quote:

In the future, I would like to get more income from our portfolio
Why?
__________________
mrfeh is offline   Reply With Quote
Old 01-15-2015, 09:32 AM   #4
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,972
It would take a while to figure it out exactly but it's somewhere between 2.2-2.5%
__________________
aaronc879 is offline   Reply With Quote
Old 01-15-2015, 09:34 AM   #5
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,906
Quote:
Originally Posted by Sea Kayaker View Post
About 6%.
Junk bonds?
__________________
Fermion is offline   Reply With Quote
Old 01-15-2015, 09:38 AM   #6
Thinks s/he gets paid by the post
 
Join Date: Feb 2012
Posts: 1,104
Quote:
Originally Posted by aaronc879 View Post
It would take a while to figure it out exactly but it's somewhere between 2.2-2.5%
Same answer!
__________________
H2ODude is offline   Reply With Quote
Old 01-15-2015, 09:45 AM   #7
Dryer sheet aficionado
 
Join Date: Oct 2014
Posts: 46
Quote:
Originally Posted by mrfeh View Post
We have a standard boglehead portfolio. Looking at divs on total market equities and intermediate bond funds, something near 2% is to be expected.



Why?
Long story short, income should mitigate against "sequence of returns risk" in the draw down phase. If for example, I have a 3% withdrawal rate built in to my plan, and have 2% income, that reduces sequence of return problem in comparison to a portfolio that is more dependent on capital gains. Well, that's my thinking anyway.
__________________
phil70 is offline   Reply With Quote
Old 01-15-2015, 09:46 AM   #8
Dryer sheet aficionado
 
Join Date: Oct 2014
Posts: 46
Quote:
Originally Posted by Fermion View Post
Junk bonds?
Same question here. That's a lot of income!
__________________
phil70 is offline   Reply With Quote
Old 01-15-2015, 09:59 AM   #9
Recycles dryer sheets
 
Join Date: Jul 2013
Posts: 388
Quote:
Originally Posted by phil70 View Post
Long story short, income should mitigate against "sequence of returns risk" in the draw down phase. If for example, I have a 3% withdrawal rate built in to my plan, and have 2% income, that reduces sequence of return problem in comparison to a portfolio that is more dependent on capital gains. Well, that's my thinking anyway.
Can you explain why you think this? For equities, there is no difference between receiving a dividend of 2% and selling 2% of your shares, other than the fact that by selling shares your taxes are reduced.

For fixed income, you can reach for more yield, but that increases risk.
__________________
mrfeh is offline   Reply With Quote
Old 01-15-2015, 10:13 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
calmloki's Avatar
 
Join Date: Jan 2007
Location: Independence
Posts: 5,459
7.3%



rentals, hard money loans mostly
__________________
calmloki is offline   Reply With Quote
Old 01-15-2015, 10:13 AM   #11
Thinks s/he gets paid by the post
 
Join Date: Nov 2011
Posts: 2,361
We're not including capital gains, right? I've watched this number for many years, and for me it is consistently near 2.5%.
__________________
GrayHare is offline   Reply With Quote
Old 01-15-2015, 10:31 AM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
braumeister's Avatar
 
Join Date: Feb 2010
Location: Northern Kentucky
Posts: 8,601
Somewhere between 2 and 3%
__________________
braumeister is offline   Reply With Quote
Old 01-15-2015, 10:40 AM   #13
Dryer sheet wannabe
 
Join Date: Apr 2010
Location: omaha
Posts: 13
2.74% on 70/30 mix..........4 yrs into ER
__________________
leftymd is offline   Reply With Quote
Old 01-15-2015, 10:52 AM   #14
Dryer sheet aficionado
 
Join Date: Oct 2014
Posts: 46
Quote:
Originally Posted by mrfeh View Post
Can you explain why you think this? For equities, there is no difference between receiving a dividend of 2% and selling 2% of your shares, other than the fact that by selling shares your taxes are reduced.
The sequence of returns risk makes the difference. If I have to support myself by selling 3 or 4% of my portfolio every year, I am at greater risk of outliving my funds if the first few years of my retirement are like 2008 or 1929. If I am earning 3% in income, never have to sell a security, no sequence of returns risk. The market value of my income producing investments may decrease as well, but if I don't have to sell then I will do better when the market rebounds.
__________________
phil70 is offline   Reply With Quote
Old 01-15-2015, 11:07 AM   #15
Recycles dryer sheets
 
Join Date: Jul 2013
Posts: 388
Quote:
Originally Posted by phil70 View Post
The sequence of returns risk makes the difference. If I have to support myself by selling 3 or 4% of my portfolio every year, I am at greater risk of outliving my funds if the first few years of my retirement are like 2008 or 1929. If I am earning 3% in income, never have to sell a security, no sequence of returns risk. The market value of my income producing investments may decrease as well, but if I don't have to sell then I will do better when the market rebounds.
Not selling shares does not eliminate the sequence of returns risk.

What's the difference between owning 100 shares at $50 vs owning 50 shares at $100?
__________________
mrfeh is offline   Reply With Quote
Old 01-15-2015, 11:17 AM   #16
Thinks s/he gets paid by the post
Cobra9777's Avatar
 
Join Date: Jul 2012
Location: Texas
Posts: 1,132
Excluding cash, my average yield is 2.9%. This is probably a bit higher than most 60/40 AAs, due to 15% real estate and 5% high-yield bonds. Also, average duration in the bond portfolio is 5.9, due to a fairly large position in LQD. The equity portfolio yields right at 2.0%.
__________________
Retired at 52 in July 2013. On to better things...
AA: 55% stock, 15% real estate, 27% bonds, 3% cash
WR: 2.0% SI: 2 pensions, some rental income, SS later
Cobra9777 is online now   Reply With Quote
Old 01-15-2015, 11:30 AM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
HFWR's Avatar
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 12,964
~2.5%
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Old 01-15-2015, 12:00 PM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,465
Quote:
Originally Posted by GrayHare View Post
We're not including capital gains, right? I've watched this number for many years, and for me it is consistently near 2.5%.
I think some folks don't know the difference, which is why I take the reported "yields" with a grain of salt.
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Old 01-15-2015, 01:22 PM   #19
Thinks s/he gets paid by the post
Bikerdude's Avatar
 
Join Date: Jul 2006
Posts: 1,901
Excluding capital gains distributions its around 3%.
__________________
“I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan
Bikerdude is offline   Reply With Quote
Old 01-15-2015, 01:28 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,974
Wow, I must be doing something wrong if others are getting 6-7.3% in yield alone. Yes I know it's possible but

Last year my total return was only 5.9% (Intl, VGELX & Short Term Bonds hurt overall). Of that 3.1% was appreciation and 2.8% yield (dividends/STCGs).
__________________

__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Help with "hybrid bond" in my portfolio (30-yr yield with 1-year duration!) BackcountryMe FIRE and Money 7 02-21-2013 11:04 AM
What Does Your Portfolio Yield These Days? CaseInPoint FIRE and Money 32 05-27-2010 07:51 PM
What is your cash yield on assets? haha FIRE and Money 43 12-03-2007 09:42 AM
"Your" Ideas are worth "Millions"!!! AJL FIRE and Money 14 10-11-2005 01:36 PM
Quest for yield verus safety unclemick FIRE and Money 49 11-13-2003 04:22 AM

 

 
All times are GMT -6. The time now is 04:50 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.