We're opening the doors to Amos Value!
From 6th July, you can find Amos Value at Avanza, Nordnet, Montrose, SAVR and Alpcot, making value investing more accessible.
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Saving goal
Living off dividends
Living off the returns of an invested capital base, sometimes called FIRE, means building a capital large enough for its returns to cover ongoing living costs. It requires disciplined saving, a sustainable withdrawal rate and time for the capital to grow.
What it takes to live off your capital
Your capital works for you
Living off dividends or returns means the capital itself generates the income you would otherwise get from a salary. It requires a sufficiently large capital base, a withdrawal rate the capital can sustain over time, and a portfolio built to hold up through both upturns and downturns. The earlier you start, the more time the capital has to grow before the withdrawal phase begins.
- The withdrawal rate determines sustainability
- A withdrawal rate that is too high risks eroding the capital, especially during downturns early in the withdrawal period.
- Dividends or total return
- Some choose to live only off dividends, others sell units regularly. Both approaches require the same thing: a sufficiently large capital base.
- Inflation erodes withdrawals
- A withdrawal that is not adjusted for inflation loses purchasing power year by year. Our calculator accounts for this.
Guide
How to build a capital you can live off
Reaching a point where returns cover your living costs requires a clear plan rather than a single successful investment. Four factors determine how quickly and how sustainably it happens.
- The withdrawal rate (the 4 percent rule)
- A common starting point is that an annual withdrawal of around 4 percent of the capital has historically had a good chance of holding up over long periods. It is a rule of thumb, not a guarantee. The withdrawal rate should be adapted to the portfolio composition, time horizon and market conditions.
- Sequence of returns risk
- Sharp downturns early in the withdrawal period do more damage than the same downturn later, since withdrawals are then made from an already reduced capital. Entering the withdrawal phase with a well-composed portfolio reduces that risk.
- Dividends versus selling units
- Living off dividends provides a natural cash flow without selling units, but limits the selection to dividend-paying companies. Selling units regularly gives access to the full return, both price appreciation and dividends, but requires you to manage the withdrawals yourself.
- ISK simplifies withdrawals
- In an investment savings account, holdings are taxed at a flat rate regardless of withdrawals, which makes ongoing withdrawals simple without triggering capital gains tax on each sale.
The building blocks
Three parts make up the withdrawal strategy
Being able to live off your capital rests on three parts working together: the size of the capital, how it is composed and how much is withdrawn each year.
01
Size of the capital
The target capital is determined by your annual living costs and the withdrawal rate you plan for. The lower the withdrawal rate, the larger the capital required.
02
Portfolio composition
A portfolio of quality companies with stable cash flows offers better odds of withstanding downturns during the withdrawal phase.
03
Withdrawal rate
How large a share of the capital you withdraw each year determines how long it lasts, and whether it even shrinks over time.
Launches 6 July 2026
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Available platforms
You can now invest in Amos Value E (Dist), our distributing share class. Choose the platform you already use.
Amos Value E (Dist)
Part of the return is paid out to you in cash as a unitholder.
More platforms will be added continuously
Past performance is not a guarantee of future returns. The money invested in the fund may increase or decrease in value and you may not get back the full amount invested. Read the fund's key information document and prospectus before investing.
Common questions about living off dividends
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