What is your net worth?

[celtosaxon]

Net worth should include the equity you have in your home (market value less outstanding debt).

However, you should not include the equity in your primarily residence in your net worth for retirement purposes. Even if you intend to downgrade or move to a cheaper locale, I wouldn’t recommend considering it unless you’ve already bought that retirement home, have lived in it before and are absolutely... unequivocally... 100% sure.

Including house?

 

[celtosaxon]

I should have qualified my statement - “most people who are serious about saving & investing” can double their net worth every 5 years. Someone in their 20’s just starting out should be plowing all of their savings into indexed equity. As they progress in their career, the combination of higher income and savings over time together with the magic of compounding... it all adds up.

What are you smoking? Double in every 5 years without any qualification? Your irr is 14% EVERY year?

You should write in to cpf to solve all our retirement problems

 

[havetheveryfun]

I should have qualified my statement - “most people who are serious about saving & investing” can double their net worth every 5 years. Someone in their 20’s just starting out should be plowing all of their savings into indexed equity. As they progress in their career, the combination of higher income and savings over time together with the magic of compounding... it all adds up.

what kind of indexed equity ?

though what u say has some truth to it,

dow jones have increased by over 300% from 2009-2018, a dow joes ETf would have returned you 300% over these 10 years. but will it continue to do so for the next 10-20 years? Feels like quite a tall order.

but on the other hand, someone could also dwindle their net worth by half or to 0 from investing.

 

[celtosaxon]

I’ve gone through all the investment returns of every single period of the S&P 500 since before the Great Depression until today.

Even the absolute worst 20 year return was 5% per annum, average 12% and best was 18%.

If you look at all 30 year periods, the range narrows further... the worst is 10% the best is 14% and the average is 12%.

This, despite all the crashes, crisis, recessions, depressions.

The 300% you mention was from the lows in 2009. You should look at full year annual returns without any optimized timing. You will then see that 2009-2017 no longer look so special. Compare it to 1991-1999. Compare it to 1979-1989.

Those who ride out the ups and downs are rewarded in the long term. And with all the low cost index ETFs available today, you can dollar cost average into these without fear of picking the wrong stock or picking the wrong moment to get in. It’s never been a better time to be an investor... all you need is patience and discipline.

what kind of indexed equity ?

though what u say has some truth to it,

dow jones have increased by over 300% from 2009-2018, a dow joes ETf would have returned you 300% over these 10 years. but will it continue to do so for the next 10-20 years? Feels like quite a tall order.

but on the other hand, someone could also dwindle their net worth by half or to 0 from investing.

 

[Toni90]

I’ve gone through all the investment returns of every single period of the S&P 500 since before the Great Depression until today.

Even the absolute worst 20 year return was 5% per annum, average 12% and best was 18%.

If you look at all 30 year periods, the range narrows further... the worst is 10% the best is 14% and the average is 12%.

This, despite all the crashes, crisis, recessions, depressions.

The 300% you mention was from the lows in 2009. You should look at full year annual returns without any optimized timing. You will then see that 2009-2017 no longer look so special. Compare it to 1991-1999. Compare it to 1979-1989.

Those who ride out the ups and downs are rewarded in the long term. And with all the low cost index ETFs available today, you can dollar cost average into these without fear of picking the wrong stock or picking the wrong moment to get in. It’s never been a better time to be an investor... all you need is patience and discipline.

It is the rise of US? If it fail then how?

 

[BBCWatcher]

It is the rise of US?

The previous 100+ years have seen an astounding run for the United States, no question.

The United States has been the world's largest economy since at least the 1920s, when it clearly passed the United Kingdom. (The national accounting during wartime is trickier, but clearly by the 1920s the U.S. had passed the U.K.) Fun fact: In 2017, California pulled ahead of the United Kingdom and now has a larger economy. California on its own would now rank as the world's 5th largest economy.

If the United States performs merely as well as the United Kingdom did from the 1920s to the present, there's still a lot of growth and wealth generation yet to come. And don't get too hung up on "U.S." here. McDonald's, for example, only earns about 35% of its revenues from the United States. Yes, MCD happens to be headquartered, listed, and traded in the United States, but it's a seriously international company. Or, to pick another example, IBM happens to be headquartered in New York and listed/traded on the New York Stock Exchange, but where can you find the largest number of IBM employees? In India.