Originally Posted by huusom
To be specific, I need to generate around 3K per month to live reasonably well (not much but I'm not a big spender). How much principle do I need to generate this kind of incomes?
You can lose principle several ways:
- Market price decline
- Default of bond/CD (in excess of FDIC insurance) issuer
One way to determine how much money principle you need is to look at returns for various investments and compute the principle needed from there. Then determine which investment meets your risk criteria.
CD - 3 % apx 1,200,000
High Yield Corp Bonds - 9% - 400,000
You also could do a combination of the investments.
What do you think?