"Ramsey's verdict was immediate: 'Yes, you are work optional in terms of the actual arithmetic, but not your spirit. Spirit is not work optional.'"
"Ramsey calculated that $4 million invested in growth stock mutual funds could generate $320,000 to $400,000 annually, well above D's $120,000 annual need."
"At 4%, a $4 million portfolio generates $160,000 per year, still comfortably above D's $120,000 spending."
"The one real financial risk is inflation, which could impact D's long-term financial sustainability."
D sold his business and real estate for $4 million and questioned his need to work. Financial expert Dave Ramsey confirmed D's financial independence but emphasized the psychological aspect of work. With $4 million invested, D could generate between $320,000 to $400,000 annually, far exceeding his $120,000 yearly expenses. Even using the conservative 4% withdrawal rule, D's portfolio would still provide sufficient income. The current bond yields suggest that D could cover his expenses without depleting his principal, although inflation poses a financial risk.
Read at 24/7 Wall St.
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