both have their moments
The math speaks for itslef: even assuming one wishes to face the currently high risk to capital in asset markets, 1 million dollars invested in stocks and bonds (given currently historic low yields) can generate gross income of about 3-4% a year before tax, and before paying any commissions or management fees. Less if you are holding cash, less if you are holding gold (no income at all). So, 1 million in savings might generate about 35K a year gross income. Less than 1% of the population has 1 million dollars in liquid capital outside of a residence. Of the people that do, many have a life style level or income expectation higher than 35K gross a year. Few people have a defined benefit pension plan today that meets their income needs in retirement. For those who don’t but determine that they require for example 5K a month or 60K a year net (modest by some standards), then one would need to have about 2.5m of income producing assets outside of your home. About .5% of the world population has this level of savings. If you can live on 30K a year before tax and any fees, then retire on 1m by all means and hope you don’t live too long. If this is too little income, or you do plan to live into your 80 s+, then rather than pile into more risk assets (which are highly likely to be capital destructive from current price levels eventually), people are best served by lowering their expenses and working longer to provide for their income needs. That is the truth, without the sales puff of financial planning .
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