I have started to wonder, how do you live off of your stocks, because as i understood many of you whom post here, are in fact having only income from stocks, so do you trim your high positions … monthly ? Yearly? Have a significant account for cash?
I’m still many many many years away from being able to do that, but hopefully someday i can go to work because i want to, not because i need to to support my family 
Thanks!
I have started to wonder, how do you live off of your stocks, because as i understood many of you whom post here, are in fact having only income from stocks, so do you trim your high positions … monthly ? Yearly?
Personally, I have never understood why some trim winning positions…I much prefer trimming losing positions.
I have started to wonder, how do you live off of your stocks…
I don’t know if Saul has ever answered this. He probably has at some point since he is so thorough in providing the board with so much information about his portfolio.
I’m sure with Saul’s gains in the past decade or so, he needs very little of his portfolio to actually live on. I would be more interested how he lived off his stocks in the earlier years when his portfolio was a lot smaller. Sell a little bit here and there, of course, but what? Just winners, just losers, a mix, what percentages? How do you budget?
Interesting question you posed, MarkoKurs.
Pete
At 37 I quit my job and started “living off stocks”.
Here’s my process:
Every year on July 1st I withdraw one year of cash from my portfolio for living expenses.
This cash is raised by a) selling “losers” and b) trimming overweight stocks as indicated by a target allocation I’ve set.
That’s it.
Recently, raising cash has been done for me because BWLD, PNRA, WFM have been bought out. That brings me to 3-4 years of living expenses.
I’m finding living off stocks isn’t really about investing anymore it’s about capital allocation.
-Chris
You might want to check out the Retirement board http://discussion.fool.com/retirement-investing-100154.aspx?mid=…
Various flavors of this kind of question come up there all the time, both from the perspective of people doing it and from the perspective of people wondering what to do when the time comes.
“Personally, I have never understood why some trim winning positions…I much prefer trimming losing positions.”
In a bull market it is readily apparent who the laggards are. Unless you have an insight you think the market is missing price is truth. Cull the laggards and let your winners run imo.
Rob
A while ago I asked Saul this very question in a private message. I don’t think he would mind if I paraphrase his comments.
He replied that his decision process is no different in order to withdraw funds than it is for any other investment decision. If a given equity is over his intended allocation, it is a candidate for trimming. If he feels that a given equity has “run its course” (my words, not Saul’s) and he considers it time to sell some or all for reinvestment, he does the same for raising cash.
Also, he said he withdraws cash when he needs it (i.e., taxes, travel, etc) rather once a year or per a schedule. He didn’t say, but I assume he withdraws a given amount periodically to cover day-to-day expenses.
At 37 I quit my job and started “living off stocks”.
Without knowing your current age, can I ask what you do for health insurance. Are you in the US?
Thanks,
mazske
My wife and I retired from our dental practice Sept. 1 of 2017. I am 68 years old.
I have allocated approximately 30% of our liquid assets to cash. The rest is invested in stocks 100% of the time. That is my comfort level. I find it reassuring that no matter how the market performs, we have enough to live on for a few years without having to sell equities. Being debt free for the past 25 years enabled me to stash away money each month in stocks.
Stock investing has also made it possible to enjoy a lifestyle I could have never imagined as a young dental student 45 years ago.
Reading Saul’s Investing Discussions has been the most profitable investment tool I’ve ever used. It has given me a way to evaluate companies, their revenue and earnings, and management. I’m still thankful for the Westport discussion board where I first started reading Saul’s blogs. (WPRT is still not a profitable company, just as Saul predicted ~5 years ago.)
Thanks, Saul, for the huge investment of time you have made to this discussion board.
Still learning after all these years.
Jim
Without knowing your current age, can I ask what you do for health insurance. Are you in the US?
Bump. This is probably the one big thing keeping a lot of people still working, or thinking they have to. I’d love to know…
Without knowing your current age, can I ask what you do for health insurance. Are you in the US?
Bump. This is probably the one big thing keeping a lot of people still working, or thinking they have to. I’d love to know…
I’m thinking this will be a big factor in determining whether I’ll want to keep a full-time job past 45 or 50 (or whenever the youngest of my yet-to-be-born children) is old enough that I don’t feel a need to keep a job solely for a deal on their health insurance.
I am hopeful that the Berkshire, Amazon, JP Morgan deal can be a big-time factor in staving off the seemingly-continual increases of health insurance costs that have been blowing away inflation.
https://www.bloomberg.com/news/articles/2018-01-30/amazon-be…
I invest mainly for income. I live entirely off my portfolio. I believe the income portion of the investment is more stable than the capital gains portion. The current downtrend of the past few days has dropped my portfolio value about 5%. Meanwhile 4 of the securities in my portfolio (out if 8 in total)declared their distributions in Jan to be paid in February and all 4 of them increased their distributions. About half of the incoming money is not needed for expenses-FED and STATE taxes Gifts and charities. That excess funds will be reinvested in additional shares for additional income and if share prices are lower due to the current selloff, I will have the opportunity to add shares at adventaigous prices. The additional shares purchased and the additional income from those shares provide the bulk of the growth in my portfolio.
b&w
My wife and I retired from our dental practice
Oh that kind of drilling! I always had you penned in as a Red Adair oil patch drilling baron.
Ant
Thanks, Saul, for the huge investment of time you have made to this discussion board.
Seconded!