Skip to main content
No. of Recommendations: 0
First rule of thumb: If you want your stash to provide a perpetual income, never draw more than 5-7% of its value, per year. This assumes 3-5% inflation and 8-12% return. Keep your assumptions conservative.
Second rule of thumb: Once established, always draw the same amount, adjusted for inflation. Don't get greedy during good years.
Third rule of thumb: Keep at least one year's draw in cash & CDs/Ts (some Fools say 3-5 years, to ride out bad markets).

If you follow the above rules, then investing in the FF is reasonable, although not diversified. You would replenish your cash yearly, when you rebalance your FF portfolio. This will also keep your trading costs down.

Zev
Print the post  

Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.