I settled a lawsuit with my employer because he forced me to use a ladder that wasn't rated for my bodyweight. I broke my left leg and foot. After legal and medical I'll receive 224k.
I'll be out of work for at least a year, possibly longer so I'll be needing some form of income. I was making 50-60k a year at my job but with my wife working full time now, we'll only need about 2500-3000 monthly to maintain our current budget.
I'm looking for advice on how to generate as much passive income as I can with as little risk as possible. Is it possible to generate 30k a year in passive income with an initial investment of 220k?
Settled lawsuit against employer because I got hurt now I need passive income
byu/whoareUwhoareWe inpersonalfinance
Posted by whoareUwhoareWe
7 Comments
30/220 = 13.6% rate of return.
Im not going to say you *can’t* do it but I can safely say you can’t do it without taking a level of risk higher than the total stock market index.
I am assuming you’re younger than 40. If this were me I would think along the line of using this money to set up an emergency fund of about 3 months’ living expenses and set another 30k aside, all of it in a HYSA or money market. You should be able to get about 4%. This way you are set until you recover.
I would invest the rest 60% US total stock market and 40% total international market. And I would try to invest it in tax advantaged accounts like a Roth IRA or a 401k.
…can you not use the 224k for a year?…
Also search the sub for passive income
Have you got unemployment, short term and then long term disability benefits?
You’re looking for ~13% returns with little risk which is not realistic in the short term.
You need 1.2 million in dividends to get an annual return of $60,000 . At 5% return
Invest it and use the earnings ig
For one year, that’s 36k out of your 224k. The 188k in a HYSA would yield some 5-8k of interest (taxes yadda yadda) so at the end of the year you should still have some 190k+.
Honestly, if it’s just a year I would just grin and bear it. Put what you need for a year and a half in a HYSA and the rest in VOO or similar.
Making risky investments to get better returns is not a winning strategy.
The risk here is “a year _or more_”. I would use the time to upskill for a job that doesn’t require the use of your foot, just in case.