gettyFallacy #1: Price Equals WealthSay you bought a $500,000 suburban house a while back and now it’s worth $1 million. To be sure, price translates into wealth if you are about to sell. If in 2011 your stock and bond portfolio was worth $1 million, now it’s probably worth $2 million. I think a 2.5% draw is fairly safe, at which rate you could spend $50,000 a year out of a $2 million portfolio. That’s better than the old rate on the old $1 million price of the portfolio, but it’s not hugely better.

Source: Forbes March 20, 2021 16:07 UTC