I'm trying to understand the concept of 'yield 4%'. Could someone explain what it signifies in the context of investments or financial returns?
7 answers
Carlo
Fri Dec 13 2024
With this asset base, operating at a 4% annual interest rate, the individual can theoretically maintain their assets while covering their living expenses.
Alessandra
Fri Dec 13 2024
The "4% rule" is a financial strategy that suggests individuals can cover their living expenses with an annual interest rate of 4% from their investments.
Ilaria
Fri Dec 13 2024
To achieve this, one needs to accumulate assets that are 25 times their annual spending.
KatanaBladed
Fri Dec 13 2024
For instance, if an individual's annual expenditure is 2.5 million yen, they would need to build an asset base of 62.5 million yen.
SamsungSpark
Thu Dec 12 2024
This rule is often used as a guideline for retirement planning, as it provides a framework for determining how much savings are needed to sustain a desired lifestyle in retirement.