Her current expenses are 100,000 and her art sales are 50,000, so this year she needs to generate 50,000 from her portfolio of 1020000, or 4.46%. If you think in real terms, her net income requirement stays at 50,000. If you prefer nominal, then you would inflate her expenses and income by 3%, so she would need roughly 7.5%.
So she needs 4.5% real of 7.5% nominal. The 4.5% isn’t adjusted for inflation because it’s real. |