It is common to hear about selling stock shares to augment inadequet yield. The yield is generally known, but how much can be taken from capital appreciation?
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Income & Dividend Investing
It is common to hear about selling stock shares to augment inadequet yield. The yield is generally known, but how much can be taken from capital appreciation?
A 2% inflation-adjusted amount is often cited, so I decided to test the price history of VWINX without dividends or capital gains. After all, dividends don't matter ..... much.
These are the initial parameters. They can be changed if someone wants to try something else.
Initial balance $100,000 in 1970 dollars
A 2% annual withdrawal that is inflation indexed.
A monthly withdrawal of $166.67 (we are in high cotton now!)
This is a screen shot of the spreadsheet
Remember too that any dividend cash flow would be reduced along the way. Monthly expenses would accelerate cash withdrawals due to eroding dividend cash flow. The end would come much earlier than the chart indicates.
