5 ms·
She had many years to compound.
by meric 8y ago
She had many years to compound.
- wjn0 8y agoQuick script, to show some example numbers on how this could happen (assumes she worked for 75 years, that her salary kept up with annual rate of inflation and she always invested 10%, and a very high annual rate of return of 10%) [1]. [1] https://gist.github.com/wjn0/67641a83d61e2fe74f8729f65fe4bdb4 https://gist.github.com/wjn0/67641a83d61e2fe74f8729f65fe4bdb...
- pedrocr 8y ago10% isn't a very high annual rate, it's probably almost exactly what the stock market returned over that period.
- wjn0 8y agoWarren Buffet says 6-7%, and by rules of compound interest, that 3-4% difference is a lot over 75 years, so I'd say "high." I'd guess a really good, modern, algorithm from the past couple years could average, maybe, 15%? I actually have no idea.
- garmaine 8y agoThere’s no need to quote authority; this is public data. The annualized return on the S&P 500 over the last 75 years (Mar 1943 - Mar 2018) was 11.35%. Adjusted for inflation, 7.45%.
- andrewprock 8y agoWarren Buffet: 6-7% S&P returns: 7.45% Looks like Warren Buffet knows what he's talking about.
- garmaine 8y agoWe shouldn't defer to authority on things that can be readily checked ourselves.
- Spooky23 8y agoMy personal overall rate of return is 13% over the last 20 years, without any algorithmic bullshit. Just 80% in a basket of dollar cost averaged mutual funds and 20% in cash strategically invested when opportunity arises. Iirc, last year was around 14% in the mutual funds, with the “fun money” mostly cash.