Steve,Steve Navra said:If you want 100% guaranteed income you will get returns based on that low risk profile. (Cash rate about 5%) Also you will give up all your future capital growth.
I disgree - I am not giving up all future capital growth. I combining a low risk strategy with a high risk strategy. I am receiving a guaranteed base pension (abet at a consequently relatively low rate of return). But I still have IP & shares, which have higher risk & also growth, which I use to LOE. This is in contrast with your structure which appears to combine 2 high risk strategies.
I agree that most here are in the asset acquisition phase. But this thread is titled 'Living Off Equity - a Reality Check' - it's about the degree of risk when retiring using LOE.Steve Navra said:I wish to make a point here:
The vast majority of forum members are at the asset acquisition stage (Still building their portfolios) and that with such a low risk profile (100% guaranteed) they will literally never get to a decent retirement.
Another very valid point I wish to make to all retired members, is that 100% guaranteed income with no risk and low returns is VERY RISKY !!!
This is what our parents did and then high inflation completely wiped them out:
When their investments were earning them just the cash rate and inflation was more than double that. (Their dollar buying power was less than half)
It is very easy to forget these times, especially now in times of low inflation.
The risk of 100% guaranteed income is that there is a chance (Certainly greater than a 10% chance) that inflation will again one day exceed the return on cash.
Everyone is a risk taker, the great thing is everyone gets to choose which risks they take. I value my SANF, therefore I have chosen to combine a guaranteed base income and also a LOE strategy.Steve Navra said:If this is your choice then I am surprised: I DIDN”T REALISE YOU WERE SUCH A RISK TAKER.
The point I keep making is the use of a guaranteed base income strategy combined with additional growth assets for use with LOE.
Cheers,
Keith