I get that Intercst, and I don’t degrade a college education, but you can tell the ones who actually have a great education and the ones that only pretend they do. That is why I laugh when people talk about meritocracy.
Yes, if you stopped then. But if you were able to invest say, an additional $350/month over that time period you would have invested a total of $136,000 but have a final portfolio value of over $800,000.
If you followed TMF’s (then) advice of investing 15% or more of your income in low cost index funds you would be a multi-millionaire by now.
Source: I followed TMF’s advice.
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If you retired 30 years ago when I did, and put your retirement money in the S&P 500, you’d be doing the compounding off of hundreds of thousands of dollars, or millions (minus, of course, 30 years of withdrawals for living expenses.)
Funny thing about the withdrawals – Vanguard tells me that my last 10 years of withdrawals average out to about 0.3% of assets per year (i.e., much less than 10% of a 4% inflation-adjusted withdrawal) With portfolio growth over time, withdrawals are lost in the round-off. I’m living comfortably on less than most people lose to a financial advisor’s “percent of assets” fee.
Remember, Retirement Investing is a 50-60 year project. Most people will save for 25-30 years, and then God-willing, spend 25-30 years spending the money down. Lots of time to take advantage of compounded investment returns.
intercst
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Which is still a paltry sum.
But if you would have invested in single stocks you would have been much more than a multi-millionaire by now.
Source: Which I did and am now one.
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Right, but that isn’t what most people are doing is it? What you are suggesting is what people might want to do after they have acquired enough money to retire, but not what they might want to do while acquiring money. That is very important for anyone to understand.
Or not. What if I’d invested in say Compaq and Bristol-Myers Squibb instead? I’d be considerably less wealthy today. There’s more of a risk in selecting individual stocks.
And we have a considerable amount of research today that shows that merely holding an S&P 500 index fund beats 95% of active mutual fund managers and about 98% of amateur stock pickers.
The way I explain it, "What if I told you that there was a method where you could go to engineering school, never attend a class or crack a book, and still get a starting salary and lifetime income equal to or greater than 95% of your classmates? And it takes essentially zero percent of your time to implement this method. Would you be interested?
“Of course not, it sounds like a scam. Otherwise, why would we have Wall Street and Robinhood?”
intercst
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If you invested in the correct single stocks. Research shows the vast majority of people don’t.
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No. Investing in an index fund is the low risk path to wealth, both while you’re saving for retirement, and after you’ve retired. You’re swinging for the fences with individual stocks, on the chance that you’ll be one of the 2% that out perform the S&P 500 index.
Meanwhile, the people sitting in the bleachers holding an index fund, are guaranteed a result better than 95% of the players on the field. It’s the smart bet.
intercst
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Yes, sort of.
I never heard of a “Z-list”, but there were definitely a significant number of my “classmates”, wealthy or from certain bloodlines, who were mental cripples either from birth, from chronic drug and/or alcohol abuse, or from sheer staggering spoiled slovenliness in life (probably the largest group of idiots but hard to segregate causalities).
There were courses going on not listed in the catalog, but I knew next to nothing about them. There were famously easy courses (called “guts”) populated but not attended by “mushheads”. There were odd scholarships (I was invited to compete for one) that were not much spoken of nor publicized — you got invited to compete (mine was for appreciation of bookcollecting).
In my experience, Harvard Yale Princeton definitely function not only as elite education centers, but also as casting agents for various of the elites, whether of ancestry, wealth, poetic cultural and artistic appreciation, sciences, or political connection and power. They have complex ecologies and I swam through a few of them.
I think the bright young writer in the linked video was speaking from real knowledge and experience with a little writerly embellishment.
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LOL I am sorry but that is so funny coming from someone that doesn’t take their own advice. Really if you believed that you would sold everything and invested in index funds.
Can’t. My portfolio today is a tiny tax-paid cost basis and 97% unrealized long-term capital gains. After 30+ years of LTB&H investing, I’ve run out of any tax losses to match the sale of a winner.
I’d be paying a fortune in taxes if I sold everything to put it in index funds.
The first commandment is to “limit what you lose to fees, commissions, trading costs, and TAXES”. Everything else will take care of itself over the fullness of time.
Stocks go up and down, but the money you lose to fees, commissions and taxes is gone forever.
intercst
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If you put $10,000 in the S&P 500 30 years ago and another $10,000 in each of the subsequent 29 years (like most people saving for retirement) you’d have a balance of about $2.1 million today. If you increased your contributions as raises and promotions grew your employment income over the years, you’d have millions more.
After I paid off my student loans at age 25, I started plowing about 25% of my gross income into the stock market. The last few years before I retired 13 years later at age 38, I was putting 40% to 50% of my gross income into the stock market. Over the 17 year period from when I got my engineering degree at age 21 to when I quit working at age 38, my wage & salary income grew about 6-fold. (Good things can happen when you job-hop your way through 6 different Fortune 500 companies during the 1980’s.)
intercst
You still don’t know what you are doing.
File under don’t fight sity hall.
We are going into a great depression. The bottom will be 1.5 to 3 years from now.
If you think this blurb of a headline adds up you do not belong in the markets at all.
General Motors CEO says Trump administration gave company ‘clarity’ that allowed response to tariffs
Mary Barra: Tariffs will cost us $5 billion, and prices ‘will stay at the same level’
Genius
Meanwhile the faithful are buying.
There were classes like that at Whatsa Matta U. Generally populated by football players, and other “athletes”, on full ride scholarships, to maintain the farce of “NCAA academic qualification”…because the mob must have it’s circuses.
Steve
And
And
So. There’s more than one way to skin a cat.
ralph
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If you would have put 10,000 in Apple or Microsoft 30 years ago and just left it alone, without adding any money, you would have had over 2.1 million dollars. Without another dime.
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We’re not discounting that you may be among the lucky 2% that have out performed the S&P 500 over an extended period of time. If that’s true, congratulations.
We’re just pointing out that individual stock picking and market timing is not the road to wealth for the vast majority of the population.
intercst
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Sure. But what percentage of the population correctly identified Apple or Microsoft as long-term holding that would make then wealthy 30 years ago.
Was it 50% of all American Investors, 1% of American investors, or 0.000001% of investors.
And then you compare that to all the investors that bought stocks that under performed the S&P 500 over time.
It’s like saying that buying a lottery ticket is a retirement plan.
intercst