Most medical students at Johns Hopkins University will no longer pay tuition thanks to a $1 billion gift from Bloomberg Philanthropies announced Monday.
Starting in the fall, the donation will cover full tuition for medical students from families earning less than $300,000. Living expenses and fees will be covered for students from families who earn up to $175,000.
Endowments aim to achieve perpetual existence by only spending dividends from investments. Assume growth of 8% of a billion means they can spend 80 million dollars a year without shrinking the endowment.
Removed by mod
The 4% rule can fail during some cycles, an 8% withdrawal would have numerous failure rates.
You’d have to be willing to adjust heavily during downturns, probably yearly. Adjusting like that could cause uncertainty and make it difficult to apply for all students.
3.5% over an extended period had no failures on any cycle.
The 3.5% was looking at very early retirement, such as 35/40yr old.
Edit: just want to add, those failures on the 4% were small. It was like if you started the cycle on 1 of 2 months many years ago and made no changes when shit got very bad, it would fail. The majority of the time you end up with vastly more money. But also past performance doesn’t guarantee future performance so who knows, but there is some risk.