“A good quality stock is a stock that you should keep, and you should keep, and you should keep. And you should not trade.” More from Grow: Suze Orman: Don't pay off debt with a second stimulus check — here's your 'first priority'
Here's the formula: Divide the desired annual income by the expected yield. If you want $10,000 monthly investment income, and expect a 5% yield, divide $120,000 by 5% for the amount of money you'll need to live off investment income, or $2,400,000 in this example.
With single stock investing, your investment depends on the performance of an individual company. Dave doesn't recommend single stocks because investing in a single company is like putting all your eggs in one basket—a big risk to take with money you're counting on for your future.
How To Invest 100k: The 5 Best Ways
“I don't want you to wait till you're 60 or 70 to sell this home,” she says. “I want you to downsize right now, so that you can start saving more money right now.”
Suze Orman is worth somewhere between $10 million and $30 million, which is far more than the vast majority of people who follow her advice are worth.
By this calculation, to get $3,000 a month, you would need to invest around $108,000 in a revenue-generating online business. Here's how the math works: A business generating $3,000 a month is generating $36,000 a year ($3,000 x 12 months).
The Rule of 4 says that you should withdraw no more than 4% of your total portfolio each year. Assuming you're earning at least 4% in returns, you can effectively live off of interest-earned without touching your principal balance. With a $1 million portfolio, this is $40,000 per year.
You can easily live off 2 million dollars and not go broke provided that the money is invested strategically and spent responsibly.
The Dave Ramsey Investing Philosophy
He recommends mutual funds for your employer-sponsored retirement savings and your IRAs. He says you should divide your investments equally among four types of funds: Growth. Growth and Income.
Since ETFs and mutual funds seem similar, it's easy to think either, or both, would work well in your retirement plan. But we recommend mutual funds over ETFs for retirement investing.
Since I don't invest in single stocks, I don't recommend others do it, either. I look at two things when it comes to investing — real estate and mutual funds. ... If I woke up in your shoes, I'd move the 25% you have in single stocks into good mutual funds.
Yet No Comments