What do most exchange-traded funds (ETFs) and many blue-chip stocks have in common?
They’re big, they’re popular with Wall Street pundits … and they don’t deliver nearly as much income as investors need to retire.
Not even close.
I want to share some ugly and eye-opening numbers with you about the skinflint ETF industry. I recently dug into the 100 most popular funds by assets under management, and here’s what I found:
- Just one of those 100 funds yields more than 7.7% – my threshold for a truly retirement-sustaining holding.
- Only about a dozen of those funds yield more than 3%.
- The average yield of those 100 funds is a meager 2.1%.
That makes for some ugly math for retirees. If you’re relying on your investment holdings to generate enough income to take care of the bills, and your funds are delivering just 2.1% … you’d better hope your kids have a spare room to stay in.
Even if you’ve managed to build up a million-dollar nest egg, you’re looking at $21,000 in annual income, which won’t even keep you in a decent studio apartment, let alone a comfortable home to enjoy in your post-career years.
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