Generating $148,800 a year, or $12,400 a month, depends heavily on yield: the aggressive 8%–14% tier of BDCs and mortgage REITs needs only $1,240,000 but often faces distribution cuts and a shrinking principal. The article proposes three buckets: growth to enlarge the principal, income to pay monthly, and cash covering two years of spending ($297,600, held in SGOV). In a hypothetical example, a 3.5% yield whose dividends grow 8% a year would reach about $297,452 by year nine, while a flat 12% yield would still pay $148,800 and lose value to inflation. REIT dividends and covered-call distributions usually face ordinary income tax rates, so investors should model taxes by account type.
Summary written by Upside AI from the original article. Read the source for full details.
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