I grew up in a family and neighborhood that had a lot of people with invested portfolios. Many of those folks had trust funds set up, or lived off of such funds. My father drilled into us kids that you don`t spend the principal. I didn`t know what that was.
If you have $1-million and live off the interest, every year you have some small amount of money, but you still have the original million---the principal---and it`s continuing to spin off interest. Still a small amount, that interest, but it`s "new money."
If you spend that million, you can get to an all-cash basis, but you still have new living expenses. However, you have no new money...the million`s gone.
Isn`t this the same problem with $100K? Do you spend the capital, or do you invest it and use the ensuing "interest," or "return on the investment."