Rental Income or Dividends?

Steve182

6% annual growth/return from equities is by no means unachievable. S & P 500 has achieved 10.6% average TR with dividends reinvested over the past 50 years and 6.6% adjusted for inflation over the same timeframe.

That timeframe includes the horrendous 70's, .com bubble, financial crisis etc.

That's not to say that feat will be repeated, and the S & P may not necessarily be the best performing index over the next 5 decades, but personally I don't think 6% TR is an unrealistic long term target for reasonably well diversified global equities.

I would not to get too obsessed with dividends or income, over the past few years growth shares have produced higher returns than dividend shares, you just need to top slice to achieve the required income.

thegentleway

DoctorStrange said:

Also,  the thought of having everything in the markets seemed kinda scary. 

Isn’t it more scary to have everything concentrated in one property in one location? At least with the markets you can diversify (including property).

chiang_mai

DoctorStrange said:

Thanks everybody.  I should have clarified that I wouldn't be relying upon rental income alone, but a mixture of dividends, savings and rent. 

I was trying to ensure a mix of income streams, but my instincts are that property would be more hassle than is worth so was looking for thoughts on the comparing the two. I wouldn't look to buy property for this but given I already own it I was thinking it might be do-able. Also,  the thought of having everything in the markets seemed kinda scary. 

A lot to think about!

I pay a real estate agent 10% of the rent to manage all aspects including rent collection. I also pay a one off fee of about 150 Pounds to find the tenant and go through  the vetting and contracts process. All I have to do is pay the bills, or if I'm lucky, bank any profit.