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> in 1990 was $6,830 per year (about $11,700 in today's dollars) That $11,700 figure is a bit low. Take $6,830, compounded it at a very modest 3.0% and you wil
by jussij 14y ago
> in 1990 was $6,830 per year (about $11,700 in today's dollars)
That $11,700 figure is a bit low. Take $6,830, compounded it at a very modest 3.0% and you will end up with over $13,000 after 22 years.
A more realistic rate of return would be about 5% which compounds to about $20,000 in todays terms.
- jussij 14y agoHaving said that, US inflation for the last two decades has been at or below 3.0%. http://inflationdata.com/Inflation/Inflation/DecadeInflation.asp http://inflationdata.com/Inflation/Inflation/DecadeInflation...
- anonymoushn 14y agoWhere do you find these risk-free instruments that yield 5%?
- jussij 14y agoHere in Australia there are four major banks, which effectively gives them a monopoly on the entire banking sector and it's been that way for decades. All those banks pay a 4.5% dividend and on top of that you also get capital growth on that investment. Now while this is by no means risk free investing, unlike banks in America that are pretty much unregulated, these Australian banks are heavily regulated. So for these institutes the term 'safe as a bank' does in fact apply.