what can i expect for a typical yearly income with an investment of $1,000,000 in medium risk portfolio?
what can one expect for quarterly dividends with an investment like this? Do they fluctuate a lot? Also, is vanguard a good place to invest or is there a better one.
- Yada Yada YadaLv 71 decade agoFavorite Answer
Medium risk? Depending on your education of investments, this can vary from 4% to over 20% per year. There are many safe ways to invest to generate 20% a year. The difference is education.
Many people who answer don't always know different strategies that are out there. There are ways to structure your portfolio so you can have anything from zero risk, to a great deal of risk.
What's nice is if you're just looking for income, you can do it in several ways. You can collar some positions to insulate yourself from volatility. You can buy some nice conservative stocks and live off of dividends and covered calls. There's a lot out there.
Certainly some CFP's might know some of these strategies, but many do not. Take a moment for yourself and ask yourself how involved you want to be in managing your money. The more involved you become (at least initially), the greater the chance you'll find higher returns for yourself.
The further you separate yourself from being involved, the higher the chance that you'll not only pay more fees, but end up in the "buckets" of investments where you get "market" returns.
Food for thought, recently interest rates were such that you could lock in guaranteed 5% returns for several years. That wasn't too bad. So I would hope that any strategy you picked with any risk, would yield you significantly more than that!
Anyways, getting back to your question. I'd say at least 10%, but not with a Vanguard, or any mutual fund. You'd have to learn how to pick some reasonable stocks and/or sectors. Then learn how to write covered calls. It's very simple once you do. Most people I know who do this earn 3-5% a month, month after month, after month.
Hope this helps!
- yeeooowLv 41 decade ago
6% to 8% would be reasonable, but that requires the kind of investments that specialize in income and dividends.
vanguard is always a good place to put money in general, but because you have specific needs, you must seek professional help.
first: make an appointment with a CFP(certified financial planner). They work for you and are NOT in the business of selling you investments, but rather the conceptualization of everything you need to do, like living trusts, asset allocation, types of investments, types of risk and other factors that you definitely need to consider.
Also, we are entering a period where these values might be considered a little optimistic.
BUT.... you have another problem.... INFLATION...
If you are 25 today with a million dollar investment portfolio, that will safely generate $60K/year. But when you are 67, that 60K will only have the buying power of a little over $16K/year. It gets worse though, because at 67, you will still probably have 30 more years to live and that 16K will shrink each year until it’s only worth $8K/year at age 90.
A million dollars isn’t what it used to be… and it will be even less in the future.
- 1 decade ago
These are good answers so far, but more information is needed to give you a better answer.
How long do you need this money to last? If you want it to never deplete, they call that a "perpetuity." For example, if you make 5% on that million, you could take $50,000 per year forever and never deplete the original (of course inflation will decrease the real value of that money.) However, if you are 70 years old, and this is just for your own retirement, you can take out much more per year.
I agree with the previous poster that when you are talking about an amount of this size, your best bet is to get professional help. The key is to make sure that person has your best interests in mind, and is not just drumming up his own commissions and lining his own pockets.
So I would recommend two things for you:
Start reading as much as you can. The "classics" are classic for a reason. Steer clear of fly-by-night popular books on how to make money in "today's market." That stuff is garbage. One of my personal favorite classics is "A Random Walk Down Wall Street" by Burton Malkeil.
Second, begin interviewing Certified Financial Planners. Don't take the first guy that comes along. You have $1 million you will be investing, you need to make sure the person you are dealing with is trustworthy. And yes, as the previous poster said, look for a "fee only" financial planner. One who makes his money as a management fee, not from commissions. That way, your interests are aligned (he makes money when you make money.) Typical fee is 1% per year of the total portfolio value.
- 1 decade ago
First you should define what risk is to you.. if it's the volitility of funds/market going up and down, that's normal.. hardly risk at all.. you're investing, I take it, to earn income.. not to worry about fluctuation.. I'd say you can expect 75 to 90K in a medium risk portfolio (based on what I'd call Med. Risk). Since I don't your situation and technicalities, I can't really make a recommendation to you as I am licensed to do so.. there's more I would have to know. Good luck though...
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- 1 decade ago
Are you over Age 59 1/2?
How about slightly above 5.00% for 10 Years Guaranteed with No Risk?
Under age 59 1/2?
Age 50? Split the money and buy a period certain annuity for 10 Years with a portion of the money. This will pay you a monthly income for 10 Years. With the balance Buy a Deferred annuity at slightly above 5.00% for 10 Years Guaranteed with No Risk?
Fixed Annuities can be a great tool for your financial needs. Go to http://www.jdsannuities.com/immediate_annuities and read all of the sections.
- Anonymous1 decade ago
3% before tax or $30,000pa.
You can live on it, but not like Bill Gates.