Capital Needed to Replace Earning Power

Of all the assets we own, our earning power -- our ability to earn an income -- is the most valuable!

How much capital would it take to replace your annual earning power?

This is the amount of capital required to provide that monthly income, assuming your capital earns an annual interest rate of:

For each year that you need this much monthly income:	4%	6%	8%	10%
$2,000	$600,000	$400,000	$300,000	$240,000
$4,000	1,200,000	800,000	600,000	480,000
$6,000	1,800,000	1,200,000	900,000	720,000
$8,000	2,400,000	1,600,000	1,200,000	960,000
$10,000	3,000,000	2,000,000	1,500,000	1,200,000

For example, $1.2 million of capital earning 6% annually will produce $72,000 of income, or enough to replace the income of someone earning $6,000 per month.

This example is based on the capital retention method, which uses interest return only to provide income. Principal is not liquidated and remains available.

This is a hypothetical illustration only and is not indicative of any particular investment or investment performance. It does not reflect the fees and expenses associated with any particular investment, which would reduce the performance shown in this hypothetical illustration if they were included. In addition, rates of return will vary over time, particularly for long-term investments.

Will you have sufficient capital available to replace your earning power in the event of death, disability or retirement?