Often when you go to a financial planner to plan your retirement, they will give you a graph to show how your capital might fare over a period.
The process is fairly simple. You start with an amount of capital, it earns interest, dividends and growth over time, and this grows the amount of capital. Deduct the amount you draw to live on, and you are left with a balance. Then, draw a graph of the balance each year, and there is your future capital mapped out.
However, this comes with at least 2 serious drawbacks.
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