Iris
What does "live off the interest" mean? I've done a search and found out that "live off" means "get money from another source", but I still don't understand what "live off the interest" means? Is it an idiom?
Jul 8, 2015 6:26 PM
Answers · 11
I'm rather confused by your dictionary definition of 'live off'. It doesn't mean 'get money from another source' at all. If you 'live off' something or someone, it means that you depend on that source, or that person, for your support or survival. For example, parents might complain if their lazy grown-up son chooses not to get a job, and instead stays at home 'living off his parents' i.e. depending on them financially. If you 'live off the interest' of your investments, it means that these investments earn so much money for you that you don't need to work. Each month, the interest payments provide you with all the money that that you need to live.
July 8, 2015
"Interest" is a financial term: https://en.wikipedia.org/wiki/Interest So this simply means that you have so much money in a bank deposit, for example, that you can pay your bills already with the interest you get from that.
July 8, 2015
If you have invested money somewhere e.g in a bank or if you have bought shares in a company, your money will get bigger by a certain percentage each year (your money earns interest). If you live off the interest it means that you use the amount that the money has got bigger by to pay for everything. It means you don't have to have a job and just use the interest money as your income. So you live off the interest :)
July 8, 2015
Wealthy business men/women, and good investors that are able to generate a high enough interest return on their wealth are people who live off their interest. They are able to survive solely on their investments. For example; My grandfather and my father have worked very hard their lives. They take their money and leave it in the bank when the interest rates are high. If you have 3 million dollars and the banks interest rate is 2% a year. You are making 60,000$ a year simply by leaving your mony in the bank. Right now interest rates are .05-1% so people invest in the private sector more heavily, but that is a different topic.
July 8, 2015
It means to receive enough interest from an investment that you can live off that income. An example would be you have a million dollars in an investment and it makes 8 percent interest which would give you 80,000 dollars a year to live on.
July 8, 2015
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Iris
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