Reaching Financial Freedom
A piece of common wisdom we often read from financial or investment bloggers that reaching the edge of financial freedom is when our passive income from investment portfolio exceeds our living expenses.
Sure or not???
Can a portfolio full of high yield dividend stocks guarantee you a secure and sustainable future cash flow to overcome inflationary impact in your future living expenses?
In another word, is passive income from stocks a reliable source of income against future inflation?
No. Right?
Dividends from stocks are non-inflation proof. It can never be inflation adjusted by itself and that is why we must avoid this potential pitfall of relying on investment portfolio over-weighting in high yield dividend income stocks of high dividend payout ratio.
We must also be fully aware that all major categories of stocks will come in and out favour across market and economic cycles ......