For my asset allocation I am looking to diversify in several ways, one of these being a cash return investment in the form of dividends yeild portfolio.
My idea behind this portfolio is that I am looking for about 8-10 companies that have an established market share, good prospective growth and a potential for a long term sustainability. These stocks should have a history of seldom lowering thier dividend and often having a continued increase in dividends given out. These dividends will hopefully be the cashflow that allows me to pay my rent, and generall upkeep throughout my retirement.
If we expect an on average dividend yield of 4% of the assets and a monthly upkeep of $2500 in nomial terms this will mean that I’ll approximately need an asset size of $750,000.
If we are looking at timespan of 25 years not accounting for inflation I will have to save approximately $30,000 dollars yearly, or $2500 monthly with a 0 percent rate of return.
But if we now persume that I will have a similar rate of return on my investmet this will accumilate up to $1,503,403 more than double of the amount that I need with an averaged 5% annual growth.
If we reduce the monthly savings to just $1500 per month, include a yearly standard tax on assets after the 25 year period the total capital should be $843,519 with is just above my goal.
Taking into account irregularities and pitfalls this feels like a decently goal to aim for for my $750,000.
More ideas and thoughts will follow.