LogFAQs > #976838081

If you have 5mil in an index fund, and you follow the 3% rule, you will literally get 150k per year (pre-tax) forever and it will never run out. Imagine it gets to 10mil, thats 300k every year and it never runs out. Obviously over time the value will diminish with inflation but still. By that time frame your house and car should be paid off and you pretty much are down to just paying property tax and income tax and enjoying the rest of it as just leisure money. Without having to work.

Just another way the wealthy stay wealthy. And 5mil isn't even super super wealthy. If you're in your late 50s or 60s and you've been working your whole life and maybe bought a few houses you probably have that much if you include your houses, perhaps a small business, retirement savings. Alot of people fit that profile.