The Yield Illusion: How Can a High-Dividend Portfolio Exacerbate Sequence Risk? (SWR Series Part 29)
Let me paraphrase what people normally write: “Here’s how I can guarantee my withdrawal strategy won’t fail: I simply hold a portfolio with a high enough yield! Now the regular cash flow covers my expenses. Or at least enough of my expenses that I never have to worry much about Sequence Risk, i.e., liquidating principal at depressed prices.
Of course, it’s better to have both FI and RE. They’re like burger and fries. One without the other is good, but the combo is unbeatable. That’s just me, though. I’m a FIRE blogger and I’m 100% onboard with both financial independence and early retirement.
We’ve been told from a young age to put away money into a 401(k) so that when retirement comes, we will magically have enough to live on. But that’s not how the story goes for a lot of Americans.
Freelancing is like building your own microbusiness (a word I’m shamelessly stealing from The $100 Startup). Once you’ve spent some time honing your skills and building up your clientele, you could have the option to make your freelance gig your full-time career! Or not! The beauty is that you’re giving yourself options.
New round today! Vote for your favorites as the best personal finance posts battle for top article of 2018!
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Jerry’s mission is to help people become financially woke on his blog Peerless Money Mentor. There he tries to create unique and compelling content by combining his love of philosophy, hip-hop, and economics. When he is not writing, he enjoys reading, traveling, and hanging out with family and friends.