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High dividend stocks or REITs. Some markets are currently paying more than 4% as a whole: https://www.starcapital.de/en/research/stock-market-valuatio... . Russian stocks pay above 7%. Asian REITs have high dividends as well, e.g.: https://sreit.fifthperson.com/
AT&T give 7% dividend. VZ give 4.5% dividend. There should be good quality stocks which easily pay 3% dividend. If you do drip in 4 to 5 years it might become 4%-5%. But always there is a risk though
When government bond yields are below 1% from maturities from 0 to 10 years, there is no safe 4-5% return. The price/earnings ratio (or its inverse, the earnings yield), is a better measure of stock valuation than the dividend yield. In a taxable account it is better to get capital gains because of stock buybacks than to get dividends.
This ends up being a lot of money on a 5M investment, good call out.
Checkout various implementations of these portfolios:
1) Understanding All-weather portfolio: https://ofdollarsanddata.com/ray-dalio-all-weather-portfolio...
2) The Permanent Portfolio: https://www.bogleheads.org/blog/2014/09/11/harry-brownes-per...
3) Golden butterfly portfolio: https://portfoliocharts.com/2016/04/18/the-theory-behind-the...
4) All-in-one Risk Parity ETF based on an actively managed index: RPAR ETF: https://rparetf.com/rpar
5) Wealthfront risk parity mutual fund WFRPX: https://research.wealthfront.com/whitepapers/risk-parity/
If you mean 4-5% annual average return, just stick it in a total stock market index fund. There's no reason to pursue interesting or creative ideas or even spend any brain power researching all sorts of options. Since its inception in 2000, VTSAX has an average annual return of 7.18% [0]. That's 20 years, multiple US presidential administrations, multiple people running the Federal Reserve, and a big economic downtur…
This is the whole premise of FIRE[1]. Invest in a S&P index fund and you should be able to pull out 4% or so without ever running out of money. 1. https://old.reddit.com/r/fire
https://old.reddit.com/r/financialindependence is the right link
In Canada we do see 2% - 2.5% GIC offerd by some of the banks from time to time with a bit of bonus (say $1,500 maximum), but it's still far from 4% to 5%.
Edit: I'd love to hear input on why people are scared of options.
If you mean 4-5% annual average return, just stick it in a total stock market index fund. There's no reason to pursue interesting or creative ideas or even spend any brain power researching all sorts of options. Since its inception in 2000, VTSAX has an average annual return of 7.18% [0]. That's 20 years, multiple US presidential administrations, multiple people running the Federal Reserve, and a big economic downtur…
At 5 million, you're in VITSX, not VTSAX.