Like me, the FI Heroes left their careers behind in 2019. Also like me, they saw their net worth decline by more than a million dollars the next year, only to see a rebound so great that they’re up seven figures overall since leaving their jobs.
While I’m not sold on their plans to live off dividends alone, it is clearly working out very well for them. My main issue with dividends is the associated taxation, but this couple falls into a tax bracket where those dividends will be coming tax-free.
It is important to note that the first few years after retirement is the most critical time for any retiree’s long-term success. A recession just after retirement can mean that the assets just won’t go the distance.
An argument I have always heard about dividends is that they are not predictable. That can be true when you think of a single company. To hedge against this, we decided to invest in over 3,000 companies from around the world all at once.
Our target was to spend what our dividends produced. So theoretically, over the course of 2 years we should have spent $108K. The reality is that we fell really short when compared to that goal.