5 ms·
Sounds like this old joke: --- There’s an old story about a guy taking a smoke break with his non-smoking colleague. “How long have you been smoking for?” th
by tiborsaas 7y ago
Sounds like this old joke:
---
There’s an old story about a guy taking a smoke break with his non-smoking colleague.
“How long have you been smoking for?” the colleague asks.
“Thirty years,” says the smoker.
“Thirty years!” marvels the co-worker. “That costs so much money. At a pack a day, you’re spending $1,900 a year. Had you instead invested that money at an 8% return for the last 30 years, you’d have $250,000 in the bank today. That’s enough to buy a Ferrari.”
The smoker looked puzzled.
“Do you smoke?” he asked his co-worker.
“No.”
“So where is your Ferrari?”
- kaffeemitsahne 7y ago8% return, good one.
- overcast 7y agoAverage return over the last 30 years for S&P500 is nearly 7%, now add in all of those reinvested dividends.
- lm28469 7y agoAnd subtract the tax(es) depending on where you live.
- overcast 7y agoReally depends on the investment vehicle. My HRA(pre/post), and Roth(post) are cranking tax free.
- BeetleB 7y ago7% includes dividends and inflation adjustment.
- linuxftw 7y agoImpossible to actually achieve that return. Those indexes can add and remove companies at any time. Index funds never perform to the same level as an index, and that's without accounting for fees.
- extra88 7y agoVanguard 500 Index Fund Admiral Shares has a 0.04% expense ratio, it does perform at the same level as the S&P 500 Index. https://investor.vanguard.com/mutual-funds/profile/performance/vfiax https://investor.vanguard.com/mutual-funds/profile/performan...
- overcast 7y agoYep! That's my 401k, costs basically nothing to be in it.
- CydeWeys 7y agoAnyone who's been investing primarily since the 2008 economic downturn (which describes most of us in tech) has likely done better than even that.
- twiceaday 7y agoAccording to [1] VFINX (Vanguard S&P 500 fund) with re-invested dividends from Jan 1989 - Sep 2019 grew 10.25% per year on average. 7.58% / year when they account for inflation. [1] https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1989&firstMonth=1&endYear=2019&lastMonth=12&calendarAligned=true&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&showYield=true&reinvestDividends=true&symbol1=VFINX&allocation1_1=100&total1=100&total2=0&total3=0 https://www.portfoliovisualizer.com/backtest-portfolio?s=y&t...
- everdev 7y agoExactly. I quit FB years ago and all that time went to other forms of digital entertainment, but not reading books.
- DickieStarshine 7y agoI think the point is: you have to see the pattern and break out of it deliberately.
- lukego 7y agoThis joke is only funny for people who haven't read The Millionaire Next Door :)
- matz1 7y agoInstead of one ferrari, the guy get to enjoy a pack a day for 30 years! Thats not bad.
- a_c 7y agoMy Ferrari is on HN.
- jammygit 7y agoI quit Facebook and ended up spending too much time on hn