That’s really interesting. Thanks for taking the time to lay it all out like that. In the US, inflation is currently at 3.36% according to a quick search. Doesn’t that mean that in order to actually be profiting 4% in terms of actual wealth gained, I would need to find a reliable investment that is paying out 7.36%? Or am I making some sort of error here?
I guess that’s up to you how accurate you want to go with your calculations. If you also want to account for inflation go for it. I didn’t account for inflation because I originally did the calculation out of interest to see if I was just safe investing at 4% how much money I’d need to cover my current expenses. Once I got the number I wasn’t interest in going more specific because I instantly realized it would be effectively impossible for me to make that much money. For me that number was enough to get the ballpark of what it would mean to be the ultrawealthy, I wasn’t looking for a specific threshold.
That’s really interesting. Thanks for taking the time to lay it all out like that. In the US, inflation is currently at 3.36% according to a quick search. Doesn’t that mean that in order to actually be profiting 4% in terms of actual wealth gained, I would need to find a reliable investment that is paying out 7.36%? Or am I making some sort of error here?
I guess that’s up to you how accurate you want to go with your calculations. If you also want to account for inflation go for it. I didn’t account for inflation because I originally did the calculation out of interest to see if I was just safe investing at 4% how much money I’d need to cover my current expenses. Once I got the number I wasn’t interest in going more specific because I instantly realized it would be effectively impossible for me to make that much money. For me that number was enough to get the ballpark of what it would mean to be the ultrawealthy, I wasn’t looking for a specific threshold.