The Idea of Living Off Interest
Financial Management

The Idea of Living Off Interest

Many times when you ask people what they would do with say a million dollars a common answer would be that they would put the money in a savings account and then live off the interest that they would gain every month. Just recently a person was telling me that he planned to do just this with his retirement funds except with a little twist.

By the looks of it he will probably have about half a million dollars in pure money which he thinks is a decent enough funds to work with. The twist? To get this money he is going to sell things like his house and essentially live by renting a place. Therefore, the hope is that the monthly expenses for this will equal to how much he will earn without doing anything.

I personally don’t think it’s as straight forward as most people think it is. Unless you have some kind of specialized savings account, which definitely are available here at least, you have to think of factors such as you are going to get taxed if you truly get that much money every month. I used to think living off interest would be the ideal thing to do, but just living through life it seems like there are so many opportunities to try where when it comes to an income I would rather have something that I had to actively be involved with.

I treat interest money as a nice monthly present, so to speak, as opposed to relying on it. Very much like those rewards you get from using your credit cards.

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