Hello everyone! I am fairly new to the enlightening world of investing for retirement/early retirement, and to generate income.
I do have an investment plan which I will share below (feel free to share feedback), but I wanted to ask the following question:
How do people retire early via Index Funds if the compounding effect takes 30-40 years to generate a substantial amount in an account?
I imagine that the answer is related to monthly/yearly dividends generated from the index funds, however, wouldn’t withdrawing the dividend slow down the compounding effect and result in a smaller “retirement” dollar amount?
I would appreciate any feedback and maybe good resources that can help me better understand index funds/early retirement, etc.
Thank you!
- Juan
MY FINANCIAL PLAN:
1. Increase income
- currently own two six figure service-based businesses.
- grow to increase W2, and K1 distributions.
2. Buy Real Estate:
- 20 single family homes, 20 doors, Cash Flow Average ~264.11 per unit
- $5,018.00 cash flow per month.
3. Fund Portfolio - 30 Years
- Invest $250 to start, and work way up to $500 than $1,000 per month.
- US Stock Index (VTSAX) 70%
- International Stock Index (VTIAX) 20%
- Bond Index (VBTLX) 10%
Any Feedback? Wishing everyone a great, and healthy 2022!