Brainlet here asking for help.
Is it possible to live on income with an ETF*?
First, keep in mind that these stock index funds pay no dividends (at least the ones I have acess to as a Brazilian), but reinvest them in the ETF itself. That is, there is a dividend profit, but it is always reinvested. It never enters the account of the stock holders.
Some examples of numbers from an ETF.
My example is from the main ETF in the country where I live, Brazil, an ETF called BOVA11. Keep in mind that the values I'm talking about here are in Brazilian Real. BOVA11 had stock shares of R$ 48.20 five years ago. Today the quotas are worth R$ 108,21. This means a percentage increase of 124.50% in five years.
If you had bought R$ 1,000 in stock shares five years ago, today they would have earned you R$ 1,245.
If you had purchased R$ 50,000 in shares, today they would have earned you R$ 62,250.
Since you do not earn monthly dividends, the only way to have money in your bank account, to have liquidity, is by selling the shares. The sale of shares will always result in the obligation to pay a 15% income tax rate.
That is: with the sale of R$ 50,000 in shares, it is necessary to pay R$ 7,500 in income tax.
With this information in mind, I ask some questions:
>1-Let's say I want to have R$ 20,000 available to live per month as a salary. That is: I want to sell shares to have constantly, month after month, R$ 20,000.00 available to spend, less the income tax. How much money would I have to accumulate in investments in the aforementioned ETF?
>2-How is it possible to withdraw money from the ETF after a certain time, so that I can live on it without having to work anymore? If I am not working, I will not be earning salaries to invest in the ETF, and thus, although the ETF is valuing from year to year alone, R$ 20,000 (plus taxes) withdrawn monthly is still a heavy burden. What invested patrimony would have to be reached for this monthly share sale to be perpetual?
Is it possible to live on income with an ETF*?
First, keep in mind that these stock index funds pay no dividends (at least the ones I have acess to as a Brazilian), but reinvest them in the ETF itself. That is, there is a dividend profit, but it is always reinvested. It never enters the account of the stock holders.
Some examples of numbers from an ETF.
My example is from the main ETF in the country where I live, Brazil, an ETF called BOVA11. Keep in mind that the values I'm talking about here are in Brazilian Real. BOVA11 had stock shares of R$ 48.20 five years ago. Today the quotas are worth R$ 108,21. This means a percentage increase of 124.50% in five years.
If you had bought R$ 1,000 in stock shares five years ago, today they would have earned you R$ 1,245.
If you had purchased R$ 50,000 in shares, today they would have earned you R$ 62,250.
Since you do not earn monthly dividends, the only way to have money in your bank account, to have liquidity, is by selling the shares. The sale of shares will always result in the obligation to pay a 15% income tax rate.
That is: with the sale of R$ 50,000 in shares, it is necessary to pay R$ 7,500 in income tax.
With this information in mind, I ask some questions:
>1-Let's say I want to have R$ 20,000 available to live per month as a salary. That is: I want to sell shares to have constantly, month after month, R$ 20,000.00 available to spend, less the income tax. How much money would I have to accumulate in investments in the aforementioned ETF?
>2-How is it possible to withdraw money from the ETF after a certain time, so that I can live on it without having to work anymore? If I am not working, I will not be earning salaries to invest in the ETF, and thus, although the ETF is valuing from year to year alone, R$ 20,000 (plus taxes) withdrawn monthly is still a heavy burden. What invested patrimony would have to be reached for this monthly share sale to be perpetual?
