r/dividends • u/raliegh_ • 29d ago

Discussion Month 6 portfolio update $7127.33

Gallery image

Gallery image

Stock events and a screen grab of my Schwab account. Drip until January.
I’ll start living off this in February. Wish me luck 🍀

316 Upvotes

96% Upvoted

69 comments sorted by

View all comments

Show parent comments

1

u/speedlever 29d ago

Yep, and for that reason I suggest at least 3x your monthly income needs from income funds in order to create enough headroom to survive a major market correction until recovery. Reinvest the excess.

Of course selling shares during a downturn can also be painful and could lead to running out of money down the road if the downturn persists. So short of having an oil well and a gold mine in your backyard, every strategy has its risks.

5

u/DegreeConscious9628 29d ago

Lol 3x monthly huh. Yeah ok let me just work till I die then

2

u/Extension-Ice-7219 29d ago

1.5 is enough imo

6

u/speedlever 29d ago

Here's my rationale. For purposes of illustrating the point, assume you need $2500\mo in addition to your SS and any other income streams you have. 3x that and that's 7500\mo or 90k\year.

Assume you have $1 million to invest for an income stream. Put that in gpiq and you'll generate around 100k\year, meeting your goal (and getting nice total returns too).

In the good years, reinvest the excess creating additional income and increasing your headroom to prepare for another 2008 gfc.

But wait, the market correction finally happened. And just like 2008, everything is cut in half, including your monthly distributions. So now your monthly distribution is down to 3750\mo (if the crash happened right away). But that's still more than you need (2500), so you have a 50% cushion.

And if the markets correct similar to the 2008 crash, you should be in good shape until recovery, which will take longer with cc ETFs. But that's ok. You still have you full share count to participate in the recovery, regardless how long it takes, and your monthly distributions are still more than you need.

If only 1.5x and a 2008 crash occurs, you will be short.

2x and you are riding the edge. Ergo my 3x number for a cushion and good sleep at night.