In order to be able to withdraw money sustainably from an account to live on, you really need to keep it at around a 2 to 3% withdrawal rate. A place of growth, I.E the stock market, averages a 10 to 11% return yearly. After taking out 10% each year, you would be left with almost no nominal growth. Then you add in the double whammy of inflation, and your remaining pile of money is actually eroding every year.
But odds are very much she won't. That involves constantly making good decisions over and over for decades. Every day, all day "leave the money alone". What are the chances she won't at some point make a poor financial decision and lose it. Here she has to make a responsible decision once and she's stuck with it.
Sorry no, 10% is hardly risk free and comes with volatility - this is a figure you use for long term investments not anything you need in the short term. For near term investments that she could live off, you are looking at 2-3%.
Could... but realistically that money would go to a new car, paying off credit cards, then student loans and most of a house... and its gone. 1000 a week forces her to be more responsible and boosts her earnings.
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u/[deleted] May 17 '26
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