HACKER Q&A
📣 min76

What low risk passive income makes you feel secure?


I don't want to start yet another net worth for retirement/semi retirement thread. Because, 1. There is no right answer. 2. Text bookish answers like 40 or X times annual expenses don't take retained earnings and inflation into consideration.

Lets put it this way. What passive income (pre tax) makes you comfortable, if you were to put all your current net worth ( Which excludes the house you live in) in a very low risk instrument, say a 10 year government bond?. Keeping in mind, 1. The retained earnings are large enough and it will be redeployed. Hence will keep compounding. 2. Occasionally, you may have to dip into the investment for one offs.

I know there is no right answer for this question as well, since it depends on the individual. But is 360k USD per year considered decent? I know it depends on the city. But I have used a normalised number of 360k to keep it simple. (Actually I have used 1 crore per year (10 million INR) Indian rupees in this example. Converting it to USD based on the purchasing power)

  👤 marcus0x62 Accepted Answer ✓
360k of income per year from any source exceeds what 95% of the population in the United States made as of 2021[0]. What do you need that much income for in order to feel secure? It is going to be very difficult and take a very long time for most people to invest enough capital to produce such an income stream under the conditions you outlined.

Consider that while everyone worries about running out of money, you can also run out of time.

0 - https://www.epi.org/publication/inequality-2021-ssa-data/

👤 infecto
You said you don’t want to start a net worth thread but then you started one anyway and gave the most tone deaf valuation possible.

Your example would be a portfolio worth over $7MM. If it was just exchange rate conversion it would still be over $2.5MM. With either of those annualized returns you would be living really well in most/all of America. I assume it would be the same in India or even more so.

👤 xboxnolifes
> Text bookish answers like 40 or X times annual expenses don't take ... inflation into consideration.

Yes they do. The calculations are based on real returns.

As for the rest of the post, I can't really tell what you're asking.

👤 almostnormal
> What passive income (pre tax) makes you comfortable, if you were to put all your current net worth ( Which excludes the house you live in) in a very low risk instrument [...]

All net worth in one single instrument, no matter how low risk, would not make me feel comfortable.

👤 throw0101b
Richard Coffin of The Plain Bagel made a video called "The Passive Income Scam" that is worth considering:

* https://www.youtube.com/watch?v=AqZbO8Ojhmw

👤 Hnrobert42
You might consider asking this question over at bogleheads.
👤 rco8786
It’s unclear what you’re asking. Do you want investment strategies, or are you asking about living on $360k? (Which would be very comfortable anywhere in the US)
👤 lnsru
5 small rental properties should make me feel rich and secure. The income from 3 should be enough, but with 5 comes “low risk” part.
👤 benjaminwootton
It depends on lifestyle and expenses, which is probably a function of how you lived before retirement. There is no right answer.
👤 tupac_speedrap
How long is a piece of string?