40,000 from a million is this true?

Question

I heard that if you invest one million euro in a bank, you can make back 40,000 each week in interest. Is this true?

Obviously im not talking about one bank that does this - As I assume that any bank with good interest rates could give you 40,000 for a million you invest. But Im just wondering:

If so is it a regular or specific account - if so what?

Or Is it really just 40,000 A YEAR.

And if this does work - do you only get to withdraw your money at the end of the year?

Answer 1

40,000 a year would be 4%, a very reasonable & realistic expectation from a well-balanced basket of investment options.

40,000 a week would be 2,080,000 a year from an investment of less than half that, or an average of 208% return.  Not very realistic...

Answer 2

At 10% you would gain 100,000 at simple interest , after a year ,so the 40,000 seems totally off the mark ,  

Answer 3

Interest rates on large deposits run at 4% right now.

.04 * 1,000,000 is 40,000 for the YEAR.  Or about 770 per week.

What's sad is that you couldn't do the math.  No way could you more than double the money from interest alone in one year.

  

Answer 4

Well.. it's not $40,000/week I assure you.  

Generally, if you're careful you can earn about $52,000/year on some low risk investments.  Interest is declared quarterly in most cases, monthly in others.  You can withdraw the interest as your needs arise.

Answer 5

One million currency units (euros, pounds, dollars) should yield 40,000 currency units per year, if well invested. Currently you'll get more than that by simply placing it in a high interest bank account but for most people that is not good investment.

Generally, investors will invest a third of their assets in a high interest bank account, less if they have a really huge amount of money. They'll invest a third in selected government bonds and other secure investments. The final third to 40% will be invested in the stock exchange with the intention of generating capital gains.

The thing about investing money is to safeguard the capital while receiving a good income. You need to achieve growth that matches or exceeds the annual rate of inflation. So not only are you aiming to earn 40,000 units in the first year, you are also aiming to have your capital grow. If the annual rate of inflation is 4% and you meet your target, your 1,000,000 units will be worth 1,040,000 at the end of year one, plus your 40,000 units income.

Interest from a bank account will yield nearly 10% at present because the banks are desperate. Therefore 333,000 will yield nearly 33,300 but to continue earning from this source at a sustainable rate, you need to reinvest nearly half, say 16,000. Your gilts (government bonds) will yield maybe 15,000 but if bought at the right time can also give small capital gains. However, your stock market investments will give the biggest capital gains and smallest income. Overall you hope for 40,000 income and 40,000 capital gains or reinvested income.

Answer 6

You also need to bear in mind that if you consider the 40,000 as your earnings and withdraw that much each year then your capital (the 1,000,000) will never increase, therefore it will in fact devalue at the annual rate of inflation.

Ideally, just to stand still with the cost of living, you will need to reinvest at least at the rate of the current CPI (which I believe latest 'official' UK figures are in fact 4.4%).

This means that you need to be earning 4.4% in interest and leaving it in there just to stand still.

Answer 7

it depends on the interest rate how many times it compounds a year i know in U.S on a bank c.d you can get about 5% or more on that kinda money which would be close to what you where told

Answer 8

Well if you assume 4% annual interest (maybe a little bit high right now) that would come out to 40,000 a year. Sounds about right for an annual earning.  

Answer 9

No. It's not true.

It depends on the interest the bank pays, of course. But if a bank pays 5% a year, then 1 million Euros would earn 50,000 Euros in the course of a year.

So, if a bank paid 4% interest, you'd end up with 40,000 Euros...but at the end of a year, not a month.

Answer 10

If it is $40,000 per week then it is a scam and they are just trying to steal money.  $40,000 per year is very doable, you just need to find something that is paying $4% interest.  The interest, if it is in a 4% CD, is paid at the end of the year's term.

Answer 11

I got told it was about 6000 a week.

Answer 12

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