Title: Would You Accept a Guaranteed 8% Annual Return on All Your Assets for Life?
Imagine you could lock all of your assets into a guaranteed 8% nominal annual return for the rest of your life. Would you choose to accept it (1), would you consider yourself fatFIRE or not (2), and what would be your reason for that stance (3)?
This thought experiment explores how responses might differ between those who identify with fatFIRE and those who don’t. I’ll share my own answer later to avoid influencing others.
Clarifications about the scenario:
– This is purely theoretical.
– Set in a country like the United States, not experiencing hyperinflation (unlike Argentina or Venezuela).
– The 8% return is nominal.
– The 8% return is pre-tax (aside from any current holdings in tax-advantaged accounts like a Roth IRA or equivalent). Think of it as growth on a portfolio that doesn’t pay dividends, growing at 8% with taxes due only when you sell.
– Your assets remain 100% yours to inherit, but you can also liquidate portions to fund living expenses or major purchases (e.g., a yacht). If you liquidate, that portion would then yield 0% going forward. You wouldn’t be handing assets off to an annuity company.
– All of your current assets—homes, vacation properties, rental real estate, stocks, venture investments, collectibles, art, rare coins, precious metals, etc.—would grow at 8% nominal, risk-free.
– Leverage and artificial “money machines” are not allowed; only your existing assets can participate in this fixed return.
Edit #2: I’m enjoying a thoughtful, high-level discussion on this topic and appreciate the strong points made on both sides. I joined this community recently and value the engaging dialogue among others who are interested in serious fat money topics.
