45th Birthday
Recycles dryer sheets
My question is whether one should even be concerned about the "withdrawal" rate if one earns more than one spends.
In my case, if I look at planned spending in 2015, it is 4.3% of my 12/31 investment portfolio (does not include personal real estate). However, the spending is only 63% of what I will earn this year from dividends, interest, and options trading. In other words, all other things being equal, my investable assets will increase by 37% of my gross income this year. Put another way, my net cash income (gross income less all spending including taxes) will be 2.6% of my beginning investable assets.
Does the 4% "rule" apply here? Would your answer change if all my income was from w*rking?
In my case, if I look at planned spending in 2015, it is 4.3% of my 12/31 investment portfolio (does not include personal real estate). However, the spending is only 63% of what I will earn this year from dividends, interest, and options trading. In other words, all other things being equal, my investable assets will increase by 37% of my gross income this year. Put another way, my net cash income (gross income less all spending including taxes) will be 2.6% of my beginning investable assets.
Does the 4% "rule" apply here? Would your answer change if all my income was from w*rking?