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AdvancedBrazilian REITs · Lesson A5.3 · Module A5

How much to invest to live off the income?

Module A5: Building and managing your portfolio

11 slides~5 minquiz at the end

In this lesson

  • The naive math using dividend yield
  • The honest math using real return
  • How much to save each month to get there
See the slides
Stacks of coins growing from left to right

Brazilian REITs · Lesson A5.3

R$ 5,000 a month, forever: what does it take?

There's a naive calculation and an honest one. The gap between them is over half a million.

The naive math

Divide the goal by the dividend yield

R$ 5,000a month×12months=R$ 60ka year
R$ 60k÷9.6%0.8% a month × 12=R$ 625k

Looks like enough. The problem shows up over time.

The hole in the naive math

A fixed R$ 5,000 buys less and less

  1. 5,000today
  2. 4,0125 years
  3. 3,22010 years
  4. 2,58415 years
  5. 2,07320 years

Spending every payout keeps income flat — and inflation halves its buying power in 16 years.

Buying power in today's reais, with illustrative inflation of 4.5% a year.

The honest math

Spend only the real return

1.1010% return÷1.0454.5% inflation=5.26%real return
R$ 60k÷5.26%=R$ 1.14Mthe real goal

Illustrative assumptions: 10% nominal return and 4.5% inflation a year.

In practice, every month

The payout splits in two

  1. Payout10% a year
  2. Inflation share4.5% of assets buys more shares
  3. The restbecomes your income

That way assets and income rise along with inflation.

Side by side

A R$ 515k gap

Naive math

R$ 625k

  • Spends every payout
  • Income loses buying power

Honest math

R$ 1.14M

  • Reinvests the inflation share
  • Income keeps up with prices

How to get there

Saving does the heavy lifting

R$ 2,730

a month for 20 years reaches R$ 1.14M in today's money

At a 5.26% real return a year, with the deposit adjusted for inflation.

Simulate your own goal in My Plan, inside My Dashboard.

Remember this

Three takeaways

  1. Nominal yield misleadsSpending every payout shrinks your income year after year.
  2. Use the real returnYearly goal ÷ real return = assets needed.
  3. Reinvest inflationThat's what keeps assets and income standing.

Quick quiz · 1 of 2

12% nominal return and 5% inflation. The real return is…

See answer

1.12 ÷ 1.05 − 1 = 6.67%. Subtracting directly (12 − 5) gives an approximation that overstates the return.

Quick quiz · 2 of 2

A R$ 3,000 monthly goal with a 6% real return a year. How much do you need?

See answer

R$ 36k a year ÷ 6% = R$ 600k. R$ 375k is the naive math, with a 9.6% yield spent in full.

Lesson complete

Next lesson

A5.4Advanced · Lesson A5.4The unitholder's routine: monitor, react, sellAfter buying: a short routine, a response to each event and real reasons to sell.Continue
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Educational content, written for learners. Not investment advice.