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Ask HN: What low risk passive income makes you feel secure?

17 points by min76 ↗ HN
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)

21 comments

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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)
Hnrobert42
You might consider asking this question over at bogleheads.
agumonkey
I thought it was a joke but it's a real website https://www.bogleheads.org/
infecto
It is indeed, named after John Bogle. Great resource, the only detractor is these days you will see posts like this one on a regular basis.
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?
iroddis
In this case it sounds like just a bit longer than is necessary to make ends meet.
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.

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.
throw0101b
> rental properties

Being a landlord is anything but "passive".

AnimalMuppet
Does your view change if they use a management company?
wdb
Still you need to maintain the properties. You can’t expect the tenant to pay for fixing the roof or bathroom leaks, painting the house etc. That not replacing lightbulb etc
[deleted]
(comment deleted)
soupfordummies
Or owning a dozen plus franchises of fast food restaurants maybe too
marcus0x62
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/

candiodari
What do you achieve with large amounts of capital. A few examples ...

1) permanent income security (requires ... let's say 4 million USD cash (NOT in the bank, invested), that's 4 million + 2 million for your spouse). Plus, let's say add 1-2 million per kid allow them to start from such a position in life.

2) ability to start tiny companies without risk (let's say 10 million USD cash per company)

3) ability to start large companies without personal risk (let's say 100 million USD cash per company)

4) ability to have full control not just over financial security but the whole environment around you permanently (don't know, but definitely more than 100 million)

marcus0x62
How much of your lifetime are you willing to expend in order to achieve the items on your list? This isn't a question of what is possible, but rather is it worth it.
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.