Author Topic: Investing to replace job income  (Read 6981 times)

RationalReasoner

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Investing to replace job income
« on: January 08, 2015, 11:49:34 AM »
What investing options are the best to provide a stream of steady income? If my goal were to replace my job income with the income from investments, where should I begin?

BarkyardBQ

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Re: Investing to replace job income
« Reply #1 on: January 08, 2015, 12:26:24 PM »


BarkyardBQ

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Re: Investing to replace job income
« Reply #3 on: January 08, 2015, 12:47:37 PM »
Research and understand these:

Index Funds
Expense Ratios
Buy and Hold
Taxable Account
Tax Advantaged Accounts
Tax Deferred
457b
403b
401k
IRA: Simple, SEPP, Traditional, ROTH
Backdoor Roth IRA
Dollar Cost Averaging
Dollar Value Averaging
Dividends
Capital Gains
Equities/Securities/Stocks
Bonds/Fixed Income
Risk Tolerance
Asset Allocation
Safe Withdrawal Rate


But don't be overwhelmed. :)

You can start small or learn to optimize if you've already started. The members of this forum are full of useful and helpful information and a willingness to share it.
« Last Edit: January 08, 2015, 12:57:12 PM by zdravé »

Louisville

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Re: Investing to replace job income
« Reply #4 on: January 08, 2015, 12:55:46 PM »
I think what zdravé is trying to say is that your question is way too general. It's like asking, "What's the best way to live my life"?

BarkyardBQ

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Re: Investing to replace job income
« Reply #5 on: January 08, 2015, 01:00:44 PM »
I think what zdravé is trying to say is that your question is way too general. It's like asking, "What's the best way to live my life"?

I just thought shooting some birdshot at him would keep him busy until he can narrow it down :)

RationalReasoner

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Re: Investing to replace job income
« Reply #6 on: January 08, 2015, 01:17:00 PM »
Yeah, I guess I should have been more specific. I don't need an introduction to investing, but rather some specific types of investments that could generate income if I retire early. Sorry for the confusion.

Right now I'm on the verge of starting a Vanguard Total Stock Market Index fund. Would this produce income for me in say 15 years?

BarkyardBQ

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Re: Investing to replace job income
« Reply #7 on: January 08, 2015, 01:23:51 PM »
Still to vague. What are your expenses? How much do you save/invest per year?

Yes Vanguard Total Stock Market is a good investment. But what is your age and risk tolerance? These factors help determine asset allocation so you can determine if you need more volatile (but potentially higher growth investments) or more stable (bonds) to reduce potential short term loses. Less relavant, but how long will you need to live off this income, do you have family to support, kids to send to college, dreams of traveling the world that would increase your required income/spending in retirement that you don't do now.

http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need-for-retirement/
http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

Can you save and invest 25 times (including growth) your yearly expenses (not income) in 15 years?

Technically to retire, everyone has to replace their working income, be it a pension, social security, investments, rental properties or cold fusion. But you must first determine how much spending you require to live comfortably each year and whether you can produce that passively and in what time frame you can achieve it.

Right now I'm on the verge of starting a Vanguard Total Stock Market Index fund. Would this produce income for me in say 15 years?

Starting it where? In a taxable account or tax-deferred account? Do you have an option for a 401k or other employer retirement plan. Have you considered a Traditional or Roth IRA to take advantage of more tax deferrals? Can you optimize your investments between multiple plans?

What is your situation and what are your goals?

Consider writing a case study thread. http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-'case-study'-topic/
« Last Edit: January 08, 2015, 02:01:15 PM by zdravé »

Louisville

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Re: Investing to replace job income
« Reply #8 on: January 08, 2015, 01:40:34 PM »
I don't need an introduction to investing, but rather some specific types of investments that could generate income if I retire early. Sorry for the confusion.

Right now I'm on the verge of starting a Vanguard Total Stock Market Index fund. Would this produce income for me in say 15 years?
But I think you do need an introduction to investing. The very fact that you don't understand that your question doesn't make sense tells me that.
Any investment can replace job income. That's what investments are for - making money. But there are a lot of questions you need to answer to figure out which investments are appropriate for you. Most people on this forum advocate using index mutual funds to build wealth.

RationalReasoner

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Re: Investing to replace job income
« Reply #9 on: January 08, 2015, 01:44:19 PM »
Your answers further confirm to me that a Vanguard Total Stock Market Fund is a good choice. Thanks for that.

BarkyardBQ

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Re: Investing to replace job income
« Reply #10 on: January 08, 2015, 01:47:25 PM »
Good luck with that.

skyrefuge

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Re: Investing to replace job income
« Reply #11 on: January 08, 2015, 01:52:05 PM »
Right now I'm on the verge of starting a Vanguard Total Stock Market Index fund. Would this produce income for me in say 15 years?

Sure. It would also produce income for you tomorrow. Invest $1000, and then tomorrow, sell it all to produce ~$1000 of income. Sure, that $1000/day income will only last for one day, but who cares about that? You just want tha income, right, no further details necessary?

It's not like after 15 years your Total Stock Market investment will suddenly emerge from its cocoon, transformed from an "investment" into an "income-generator". Every investment can generate income at any time (by selling all or part of the investment), so the key is figuring out what investment you can expect to sustainably produce your desired amount of income over your specified period.

RationalReasoner

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Re: Investing to replace job income
« Reply #12 on: January 08, 2015, 01:58:14 PM »
Thanks for the info, skyrefuge, but the sarcasm is not necessary.

Louisville

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Re: Investing to replace job income
« Reply #13 on: January 08, 2015, 02:06:57 PM »
... the sarcasm is not necessary.
You might be on the wrong forum...

BarkyardBQ

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Re: Investing to replace job income
« Reply #14 on: January 08, 2015, 02:09:37 PM »
Dude's a serious tease. He asked an entire forum of problem solvers to help him with a puzzle. We lay down one piece and he's like, IT'S DONE!


RationalReasoner

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Re: Investing to replace job income
« Reply #15 on: January 08, 2015, 02:15:23 PM »
Haha. I think you're making this out to be more than it is. I pretty much know what I'm going to do, but I just wanted some suggestions. If it can't be done without making fun of somebody, then maybe I am in the wrong forum.  :)

Anyway, it's nothing to get angry about. Maybe I'll ask another question when I become an expert like you guys.

BarkyardBQ

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Re: Investing to replace job income
« Reply #16 on: January 08, 2015, 02:33:37 PM »
A little razzing is always in good fun. Do you care to share with us your strategy? There's an itch of curiosity you've created that just isn't being scratched.

RationalReasoner

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Re: Investing to replace job income
« Reply #17 on: January 08, 2015, 02:54:55 PM »
Unfortunately, I'm out of time. I'll try to remember to make my future questions more specifc. Thanks everyone.