[quote=AN][quote=UCGal]I agree with CAR about 8% being optimistic. Especially if you’re diversified to mitigate risk.[/quote]
I used the Dow index as my example of diversity and long term return. I just checked out BRKB’s 10 year return and it’s greater than 8% over the last 10 years. So to me, either I’ll buy a DOW index fund, try to beat the DOW with my own set of investments, or trust Buffett and his team. I don’t think I can out do Buffett and his team.
Here one other example for those who thinks 8% is too optimistic. At 4% return, you’ll have $1.47M in 20 years. Or $1.56M after 25 years at 2% return . I’m a firm beliver in the power ofcompound interest. So the sooner you start saving, the higher chance of you amassing a million or two and be able to retire early.[/quote]
In today’s market of 0% rates, 5% is more realistic. I just traced back 15 years of biggest fund and indexes with Morningstar data. Only 25% of 500 funds/indexes were over 8% avg over 15 years and only 10% over 8% over last 10 years with S&P 0% over 10 years.
By the way, I bought Vanguard Health Care 15 years ago and it is avg 14% since then. It is ranked #2 of all funds/indexes over that time period. I made the mistake of drinking/dating/diversifying, otherwise I would be ahead of Buffet by now.
Typical child care expenses are over 10K per child per year in San Diego, throw in high rent/mortgage, home expense it is very difficult to save much money even with 150K salary outside 401K. If you include 401Ks then 2-3K savings/month can be done if you stick to the picnics, etc.
[Of course this year includes the 60% rate over last 12 months. Had you done this report last year the 15 year returns would nearly all be 3% or less]
