In my conversation with you this week, we talked about the appropriate draw rate from your portfolio. We discussed how the days of a four percent draw are history. With interest rates nailed to the floor, you need to adjust accordingly. Thankfully, most of you have, I hope.
Take a look at Dick Young’s investment North Star. That, in a nutshell, is how savers are penalized by Washington.
Now, look at the dividend yield on the Dow Jones Industrial Average.
Do the math. A simple back of the napkin calculation of a 50/50 portfolio yields a fraction of what it used to. These are not easy times, contrary to what the market performance tells you, especially from a historical perspective. Pay attention to the easy monetary policy in Washington and understand nothing is free.
Action Line: Work longer, save more, expect less, and keep it simple. Happy Friday.
E.J. Smith - Your Survival Guy
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