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Tapping Your Portfolio In The Great Income Drought
I used a strategy similar to the one described in the article in the management of my late parents investments to provide an additional income stream to their social security and pension benefits. I basically, took a sum equal to 1.25% as a withdrawal from the portfolio’s quarter ending value and accrued this in their savings accounts for future use. When I got into a situation that required additional cash requirements over and above their normal income stream then this sum was drawn from their savings accounts. This worked well and the value of their portfolios continued to grow over time along with the income distribution form their portfolios as the portfolio’s valuation grew.
This is, in part, the way I came up with my recent idea to build cash within my own portfolio plus put some spiff in my pocket. When the year started the S&P 500 Index was trading at 1426. At every 25 point increase I’d take a one percent sum from my equity area leaving the other (0.6% to 0.7%) as growth for the equity area. Today my equity area has a greater value by about six percent from where I started the year; and, I took the other ten percent (withdrawn) and split it between myself and the cash area of my portfolio.
Hey, with this, I grew both the equity and cash areas of my portfolio and put some good spiff in my pocket. This kept my equity allocation within the parameters I desired and kept it from ballooning.
Indeed, if one thinks, there are ways where an income stream can come from more than just interest, dividends and capital gain distributions in a bull market run. Take it from Mr. Market.
Comments
I used a strategy similar to the one described in the article in the management of my late parents investments to provide an additional income stream to their social security and pension benefits. I basically, took a sum equal to 1.25% as a withdrawal from the portfolio’s quarter ending value and accrued this in their savings accounts for future use. When I got into a situation that required additional cash requirements over and above their normal income stream then this sum was drawn from their savings accounts. This worked well and the value of their portfolios continued to grow over time along with the income distribution form their portfolios as the portfolio’s valuation grew.
This is, in part, the way I came up with my recent idea to build cash within my own portfolio plus put some spiff in my pocket. When the year started the S&P 500 Index was trading at 1426. At every 25 point increase I’d take a one percent sum from my equity area leaving the other (0.6% to 0.7%) as growth for the equity area. Today my equity area has a greater value by about six percent from where I started the year; and, I took the other ten percent (withdrawn) and split it between myself and the cash area of my portfolio.
Hey, with this, I grew both the equity and cash areas of my portfolio and put some good spiff in my pocket. This kept my equity allocation within the parameters I desired and kept it from ballooning.
Indeed, if one thinks, there are ways where an income stream can come from more than just interest, dividends and capital gain distributions in a bull market run. Take it from Mr. Market.
I wish all … “Good Investing.”
Skeeter