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Generally, the idea is to invest each year, and hold those investments over a long period of time. You can use this calculator to run different scenarios. htt
by getToTheChopin 4y ago
Generally, the idea is to invest each year, and hold those investments over a long period of time.
You can use this calculator to run different scenarios.
https://themeasureofaplan.com/net-worth-scenario-tool/ https://themeasureofaplan.com/net-worth-scenario-tool/
Example inputs: a 25 year old with a starting net worth of $10k and who invests $7k per year over 40 years, at a 5% average annual return.
Output: net worth of $915k at age 65. This provides retirement spending of $37k per year (using a 4% safe withdrawal rate assumption).
- DwnVoteHoneyPot 4y agoIf I start at 30 years old (as per my initial comment) with $10K and $7K per year, it shows $687K. At 4% withdrawal rate that is $27K per year in retirement. Of that $687K, I would have kicked in $255K of it as principal. Sure it's something, but that's over 35 year time frame. Wealth is going to come from other sources. Doesn't really fit the "do what Warren Buffett did and be wealthy" narrative that people imply with buy-and-hold. Buffett made concentrated bets. He effectively used leveraged (using insurance premiums) to make bets. He prefers to be a business owner instead of shareholder (i know it's a subtle distinction). The Warren Buffett quotes people use to justify these strategies is misleading.
- getToTheChopin 4y agoWarren Buffett is one of the greatest investors of all-time. The average Joe can't expect to re-create his returns. There's a reason why Buffett regularly recommends (and bets on) the S&P 500 as a solid investing strategy: https://www.investopedia.com/articles/investing/030916/buffetts-bet-hedge-funds-year-eight-brka-brkb.asp https://www.investopedia.com/articles/investing/030916/buffe...