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This article is full of crap. More precisely, it's full of extremely naive ideas. > invested it in a fund with a 6% return - which is nothing special There's

This article is full of crap. More precisely, it's full of extremely naive ideas. > invested it in a fund with a 6% return - which is nothing special There's no (close to) zero-risk investment at the moment that yields 6%. > If you invest in a pension That's nice, but it's usually only tax-free when you spend it as a pensioner, not as a lump sum when you're 50 years old. >property prices double every 10 years or so Yeah, they do. Except when not. And you also spend money on maintaining the property. > This is a return of 100% on the initial investment. That sounds a bit better than 6%, right? OMG, did he just compare a yearly return with a return 'over a few years'? ... and it goes on and on. If you want to have 1M, then first learn the _very fundamentals_ of investing and finance. By the way, I have an advice: if your dream is to open a restaurant, do it now.

applecore 12y ago
A 6% return isn't that special. Long-term investments shouldn't be zero-risk, since you get compensated for risk with a higher return. The average "real," or inflation-adjusted, annual returns for U.S. stocks have been about 6% to 8%.
archagon 12y ago
> There's no (close to) zero-risk investment at the moment that yields 6%. Aside from FDIC-insured savings accounts, nothing has close to zero risk. On the other hand, something like Vanguard's VTSAX is fairly safe and is currently doing about 20% YTD: https://personal.vanguard.com/us/funds/snapshot?FundId=0585&FundIntExt=INT#tab=1 https://personal.vanguard.com/us/funds/snapshot?FundId=0585&... If we have another financial crisis things are going to suck, but other than that, since this fund tracks the entire stock market, it's pretty stable by design. Mix in some bonds and you should be in good shape. (Note: I am merely repeating advice I've run into on financial advice forums.) With FDIC-insured savings accounts, the best you can do is around 1%, which doesn't even beat inflation.
- sz4kerto 12y ago
  The VTSAX index is nice, if you're not unlucky. If you invested into VTSAX in mid-2007, then until today your annual return would be somewhere around 3.5%. Not horrible, but not 6% either. It does not matter that this year it's around 20%. What I'm saying is that you cannot simply take 6% return as granted -- it's similar to saying that property prices double every 10 years. Yes, usually they do raise, but not all the time. >If we have another financial crisis things are going to suck We tend to have financial crises in every decade. .com-bust, property crisis, Russian crisis, Black Friday, Japan stockmarket crash... they happen all the time. US Treasuries are practically zero risk, but obviously there are a lot of other risks - if you store your wealth in USD, then you have FX risk for example as most of your gadgets are produced in other countries like China, etc.
jp555 12y ago
A balanced portfolio consisting of REITs, ETFs, & Bonds is easily performing above 7% in Canada. But the post does seem extremely naive. What it costs to maintain real estate (property tax, maintenance, insurance, etc) makes even typically criminally-high mutual fund fees seem reasonable. Even if owning real estate really floats your boat why wait in fear for the next 2am call to fix a flooded basement when you can get a check every month from a REIT which being a dividend is taxed at less than half the rate of a rent income (which will likely be taxed at your highest marginal rate)?
gremlinsinc 12y ago
also, if you want to open a restaurant or anything for that matter-- DO IT -- even on a small scale -- try a food truck, or vending @ Fairs -- you need validation first to see if your food will even sell, if it sucks, then you're not out nearly as much as if you put out 1mill for a brick and mortar restaurant. -- Try your hand at catering as well maybe?

applecore 12y ago

A 6% return isn't that special. Long-term investments shouldn't be zero-risk, since you get compensated for risk with a higher return. The average "real," or inflation-adjusted, annual returns for U.S. stocks have been about 6% to 8%.

archagon 12y ago

> There's no (close to) zero-risk investment at the moment that yields 6%. Aside from FDIC-insured savings accounts, nothing has close to zero risk. On the other hand, something like Vanguard's VTSAX is fairly safe and is currently doing about 20% YTD: https://personal.vanguard.com/us/funds/snapshot?FundId=0585&FundIntExt=INT#tab=1 https://personal.vanguard.com/us/funds/snapshot?FundId=0585&... If we have another financial crisis things are going to suck, but other than that, since this fund tracks the entire stock market, it's pretty stable by design. Mix in some bonds and you should be in good shape. (Note: I am merely repeating advice I've run into on financial advice forums.) With FDIC-insured savings accounts, the best you can do is around 1%, which doesn't even beat inflation.

sz4kerto 12y ago
The VTSAX index is nice, if you're not unlucky. If you invested into VTSAX in mid-2007, then until today your annual return would be somewhere around 3.5%. Not horrible, but not 6% either. It does not matter that this year it's around 20%. What I'm saying is that you cannot simply take 6% return as granted -- it's similar to saying that property prices double every 10 years. Yes, usually they do raise, but not all the time. >If we have another financial crisis things are going to suck We tend to have financial crises in every decade. .com-bust, property crisis, Russian crisis, Black Friday, Japan stockmarket crash... they happen all the time. US Treasuries are practically zero risk, but obviously there are a lot of other risks - if you store your wealth in USD, then you have FX risk for example as most of your gadgets are produced in other countries like China, etc.

jp555 12y ago

A balanced portfolio consisting of REITs, ETFs, & Bonds is easily performing above 7% in Canada. But the post does seem extremely naive. What it costs to maintain real estate (property tax, maintenance, insurance, etc) makes even typically criminally-high mutual fund fees seem reasonable. Even if owning real estate really floats your boat why wait in fear for the next 2am call to fix a flooded basement when you can get a check every month from a REIT which being a dividend is taxed at less than half the rate of a rent income (which will likely be taxed at your highest marginal rate)?

gremlinsinc 12y ago

also, if you want to open a restaurant or anything for that matter-- DO IT -- even on a small scale -- try a food truck, or vending @ Fairs -- you need validation first to see if your food will even sell, if it sucks, then you're not out nearly as much as if you put out 1mill for a brick and mortar restaurant. -- Try your hand at catering as well maybe?