Charter Houses (2022)

Cool general idea, some of the specifics around $$ numbers are a bit... off

> Big investments generate quite a lot of money — you can draw off about 4% of an investment every year without depleting the principal, because you get back that much or more in interest.

That is not at all what the 4% rule they linked is talking about. The 4% rule means, roughly, from the original source, "95% of the time you won't completely run out of money in 30 years". Indefinite withdrawal from an endowment is a very different problem.

You want rules, trust me you want rules.

I have lived in something really close to this situation – seven furries, one four-bedroom house in Seattle’s suburbs, one person with a high-paying IT job – and it fell apart. And a big part of why this fell apart is because we never even talked about things like “maybe we should set up a chore rota”.

This also sounds a lot like “fraternities” and “sororities”, which certainly have rules. Or maybe “a commune” depending on how far outside of the city is, and those certainly have rules too. If you want to actually try to make this happen I would recommend looking at rules for those sorts of organizations, and asking yourself “what horrible mess happened that lead to this rule being enacted”, because I can guarantee that somewhere in the history of the organization, there was something that happened for every single rule that threatened the continuing survival of the organization.

> Even if you did nothing but stick the money in an S&P 500 index fund, the historical average is about 10% per year.

* With dividends reinvested, before inflation

Say S&P dividends are always 1.5%

10% total return - 1.5% dividends (ignoring the quarterly compounding aspect for simplity) = 8.5% in equity growth

Say you wouldn't reinvest them because you want cash flow equivalent to 4% of your principal

4% drawdown rule - 1.5% dividend paid out as cash and not reinvested = 2.5% drawdown needed

You really only need to pull 2.5% with the 4% rule, no? (0.625% a quarter 4 times a year?)

However, inflation is usually 2%, so you need to pull 2.5% + 2% = 4.5% every year on top of the 1.5% dividends being paid out to you? Is this accurate?

One challenge (among many) is simply that many areas limit the number of unrelated people that can live in a house. When I owned a house in a college town in the Midwest many moons ago that number was 3, for instance.

(I have heard that this is sometimes aimed at limiting brothels, though that sounds a bit like an urban legend?)