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this post was submitted on 14 Jan 2024
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This is all good and well, until a 2008 happens. That's why strategies like this are only reliable if you have generational wealth to start with. You have to be able to withstand massive risk.
Massive is relative. If you have $1M and need $40k to live on (4% rule), a 50% downturn is massive. If you have $10M and need $100k to live on, a 50% downturn still leaves you plenty of room.
You don't need generational wealth, you just need a enough that the general "rule of thumb" is way more than you'd ever need to spend. That can be amassed in one generation.
I was thinking that too. Works as long as asset appreciation > interest.
We're in a higher interest rate world with a recession on the horizon, so this strategy may not work moving forward