I’ve always thought that investing with a long-term mindset in funds has been one of the most challenging ways to accumulate wealth.

Not because it’s complicated…

You just buy a global index ($VTI) at a low cost and you are pretty much good to go.

The goal of indexing?

No, the problem arises when you start asking what you are investing for:

  • “When do I need the money?”
  • “When will I withdraw?”
  • “Am I saving for retirement or just increased wealth?”
  • “How will I get access to the cash in my funds. Should I sell all once I reach retirement?”


Is it even okay to sell index funds?

These questions have always puzzled me for many years because when you sell a fund, you are actually selling the tiny pieces/machines which make money for you. So, while you get money today, you are “stealing” from your future self.

Moreover, as we never know the future, waiting 30 to 40 years before you actually start consuming the money you’ve saved and worked hard for seems a bit meaningless to me.


Fund portfolio, with BRK.B


Acc Funds and Inc Funds

To make matters even more complicated, almost all the funds I and many other Nordic people own are noted as Acc, meaning that any income generated by the fund like dividends or interest is automatically reinvested.

This is in contrast to what many Americans own in their account as they own funds marked as Inc which means that any income generated is distributed by the fund instead of being reinvested.

Consequently, I don’t see any of my cash flow before I exit my fund position and that’s not how I like to invest.

My goal is always to get an increasing and steady cash flow which I can choose how I want to distribute. Vacation? Wine? Cash? New Assets? No matter what I choose to invest in, my objective is to have access to the cash and to make the decision myself and that’s why I wrote down my Fund Rule.

The Expenditure Fund Rule

All non-dividend paying funds (Acc) can be sold either at the beginning of a new quarter or once a year at the end of November, and the total sold amount should be between 1% to 5% in a single calendar year.

As such, I’ve forced my fund to pay dividends. I also choose the dividend yield myself. Most funds operate with a dividend yield between 2% to 5 %. If the market is expensive, I’m allowed to sell 5% of each fund per the calendar year as “cash flow”. If stocks are selling at a discount I want the fund to reinvest most of its cash flow back into the same stocks. Therefore I should be closer to the lowered range of allowable withdrawal.


YTD performance of fund portfolio

Summed up:

  • I can withdraw 1% – 5% from each fund per year
  • If the market is expensive, I can withdraw more (4% – 5%)
  • If the market is cheap, I can withdraw (1% – 2%)


The result of this is that I sell once stocks are expensive. I get cash flow which is my main objective no matter where we are in the economic business cycle. And, it’s motiving to save and invest in index funds because I get access to the reward as I save.


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