Cory Diary : Post-Retirement ROI (On) or ROI (Of)

Ideally we hope to achieve Return On Investment scenario. However, Return Of Investment aren't that bad either as long it can sustain our expenses till we passed. If we aren't clear their difference here we are. Return On Investment means the initial capital remains intact, and the income generated alone is enough to sustain one lifesyle. Most of us however will go through the Stage of Return Of Investment first where the capital has to be drawn down to achieve the expenses needed before we grow and fulfill the next level. Assuming same expenses and lifestyle.

Here's an example which I formulate myself on each stage of development. There are two main variables of control. Portfolio Size and/or Growth Target. Since this post is not about saving or efficiency, Expense is not something we like to control.

Example of Variables

Study the table closely. We could have a alightly larger portfolio size or achieve a higher growth rate with added risk that you might be set back financially instead. Ideally, both. Meaning larger portfolio and higher growth.

Inflation Rate increase is adjusting the Difficulty Level after you have achieved the Portfolio Size and Growth Rate. In above table from 3% to 3.5%. 3% is a long term inflation possibility.

Below is a sample table to compute the result above.

If we have review through various scenario, there maybe not much room for us to play around. One mis-step or major investment mistake could potentially set us back for years. We need to cherish every year of build up or we may have to push out our retirement plan to achieve certain lifestyle. 

Ofcourse if we can consistently achieve 15% Portfolio Growth Rate Long Term, you maybe qualifies to open a Master Class. Even a 10% Growth Rate could provides you a Strong Retirement Package. Now what happen if you only target 5% to 6% Portfolio Plan to eliminate Risk mostly. You will need a much larger sum of money to achieve similar lifestyle in retirement to follow as this could be impossible for many. It certainly helps on those who will lower the expense ( Life Game Difficulty level ). Is this what you really want deep in your heart ?

 

Cory Diary

2025-0126

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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.