How much money do you need to live off of investment returns?

Let’s assume the capital gains tax is 20% and the market year-on-year returns is 10%.

To make $100,000 a year just from the return on investments, here is the math:

• Total yearly return before capital gains tax = $100,000 /(100% – 20%) = $125,000
• Total amount invested = $125,000 / 10% = $1.25M

So to make $100K a year from capital gains you need to have $1.25M invested.