𝐓𝐡𝐞 𝟕𝟎/𝟑𝟎 𝐑𝐮𝐥𝐞 𝐄𝐱𝐩𝐥𝐚𝐢𝐧𝐞𝐝 (𝐒𝐢𝐦𝐩𝐥𝐢𝐟𝐢𝐞𝐝 𝐕𝐞𝐫𝐬𝐢𝐨𝐧).

There are countless investment strategies out there, with every expert claiming theirs is the best. For anyone new to investing or aspiring to become wealthy, it can feel overwhelming. So, let's break down the 𝟳𝟬/𝟯𝟬 𝗥𝘂𝗹𝗲 in a way that’s easy to understand.

Once your portfolio has grown to a few million, the goal is to protect and continue growing it while also enjoying some profits. After all, you’ve worked hard, shown patience, and stayed disciplined to get here!

𝗪𝗵𝗮𝘁 𝗶𝘀 𝘁𝗵𝗲 𝟳𝟬/𝟯𝟬 𝗥𝘂𝗹𝗲?

Simply put, it means you should reinvest 𝟳𝟬% of your portfolio and only spend 𝟯𝟬% annually.

By reinvesting 𝟳𝟬% you ensure that your portfolio—your “Golden Goose”—keeps growing and producing more profits. If you withdraw too much, it can harm future growth and reduce your portfolio's overall value.

𝗔 𝗥𝗲𝗮𝗹-𝗟𝗶𝗳𝗲 𝗘𝘅𝗮𝗺𝗽𝗹𝗲

Let’s say you want to earn 𝗥𝟱𝟬,𝟬𝟬𝟬 a month (R600,000 a year) from your portfolio. According to the 𝟳𝟬/𝟯𝟬 𝗥𝘂𝗹𝗲, this R600,000 represents 𝟯𝟬% of your total portfolio. So, to maintain this income, your portfolio needs to be worth 𝗥𝟮,𝟬𝟬𝟬,𝟬𝟬𝟬 (R600,000 x 100/30).

Now, let’s assume that after withdrawing 𝗥𝟲𝟬𝟬,𝟬𝟬𝟬 in the first year, you're left with 𝗥𝟭,𝟰𝟬𝟬,𝟬𝟬𝟬. If your investments grow by 200% over the next year, your portfolio would increase to 𝗥𝟰,𝟮𝟬𝟬,𝟬𝟬𝟬.

In year two, you’ll withdraw 𝟯𝟬% again, which would now be 𝗥𝟭,𝟮𝟲𝟬,𝟬𝟬𝟬, or 𝗥𝟭𝟬𝟱,𝟬𝟬𝟬 𝗽𝗲𝗿 𝗺𝗼𝗻𝘁𝗵—a nice raise from year one’s R50,000. And your portfolio is still growing!

𝗖𝗼𝗻𝘁𝗶𝗻𝘂𝗶𝗻𝗴 𝘁𝗵𝗲 𝗖𝘆𝗰𝗹𝗲

At the start of year three, your portfolio would be worth 𝗥𝟮,𝟵𝟰𝟬,𝟬𝟬𝟬 after your withdrawal. If it grows by 200% again, by the end of year three, your portfolio will be 𝗥𝟱,𝟴𝟴𝟬,𝟬𝟬𝟬. You’d then withdraw 𝟯𝟬%, or R2,646,000, which gives you 𝗥𝟮𝟮𝟬,𝟱𝟬𝟬 𝗽𝗲𝗿 𝗺𝗼𝗻𝘁𝗵.

As you can see, by protecting and reinvesting 𝟳𝟬% of your portfolio, it continues to grow, and so does your income!

𝗞𝗲𝘆 𝗧𝗮𝗸𝗲𝗮𝘄𝗮𝘆

The 𝟳𝟬/𝟯𝟬 𝗥𝘂𝗹𝗲 ensures that your portfolio never runs out of funds and keeps growing, along with your monthly income.

Keep in mind, this simplified example doesn’t account for market downturns or taxes, so be sure to do your own research. However, based on past performance with Crypto, NFTs, and Private Sales, a 200% annual return is realistic and achievable.

𝑩𝒂𝒔𝒆𝒅 𝒐𝒏 𝒕𝒉𝒆 70/30 𝑹𝒖𝒍𝒆, 𝒊𝒇 𝒚𝒐𝒖𝒓 𝒑𝒐𝒓𝒕𝒇𝒐𝒍𝒊𝒐 𝒊𝒔 𝒘𝒐𝒓𝒕𝒉 𝑹3,000,000 𝒂𝒏𝒅 𝒚𝒐𝒖 𝒘𝒂𝒏𝒕 𝒕𝒐 𝒘𝒊𝒕𝒉𝒅𝒓𝒂𝒘 𝒚𝒐𝒖𝒓 𝒂𝒏𝒏𝒖𝒂𝒍 𝒊𝒏𝒄𝒐𝒎𝒆, 𝒉𝒐𝒘 𝒎𝒖𝒄𝒉 𝒘𝒐𝒖𝒍𝒅 𝒚𝒐𝒖 𝒓𝒆𝒊𝒏𝒗𝒆𝒔𝒕 𝒂𝒏𝒅 𝒉𝒐𝒘 𝒎𝒖𝒄𝒉 𝒘𝒐𝒖𝒍𝒅 𝒚𝒐𝒖 𝒘𝒊𝒕𝒉𝒅𝒓𝒂𝒘?

2 comments

Enemes Academy Community

skool.com/enemesacademy

Learning Simplified

Leaderboard (30-day)

+96

+18

+12

+10