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Here's a great chart that shows return on investing in the S&P 500 over the last 90 years. "In Investing, It’s When You Start And When You Finish" http://www.ny

• tunesmith 11y ago
  That's a spectacular graph. I want to put that on my wall. 7% real (or more) is such a "rule of thumb", and that picture shows that it is bunk. Median was 4.1% real, then that means a real return at 90% or 95% confidence was even lower.
  • koonsolo 11y ago
    The picture shows 'after inflation', and the rule of thumb is indeed a 4% redraw rate, so the graph seems about right. At 4%, you will keep your capital. At lower rates, you will burn some capital, but not enough to go bankrupt, unless you are really unlucky (last part was also calculated). So in my opinion, the graph confirms the rule of thumb.