3 ms·
Why is 10% not sustainable, but 4% is?
by quickthrower2 8y ago
Why is 10% not sustainable, but 4% is?
- wutbrodo 8y agoI don't think he meant that as a law of nature. I think he meant that, empirically, sustained 10% stock market growth hasn't happened on the timescales that are being discussed (ie for a person's retirement savings), while avg 4% growth has.
- bloak 8y agoI don't know where the 4% comes from but I've seen it in several places, including in an attractive offer from an educational establishment I once attended. Apparently, if I gave them 25x (pre-tax) the annual cost of maintaining a research student then they could create a perpetual studentship and call it the "Bloak Studentship" or whatever I preferred. So they think that it is possible to get 4% for ever in real terms from a well-invested untaxed fund. They've been doing this sort of thing for many centuries so perhaps they have an accurate long-term view.
- JoshTriplett 8y ago> I don't know where the 4% comes from Originally from the Trinity study: https://en.wikipedia.org/wiki/Trinity_study https://en.wikipedia.org/wiki/Trinity_study