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something interesting - if you bought stock at the worst possible time - the DAY before the 1929 stock market crash- and diversified it across the top 200 companies ten years later you STILL would have received the equivalant of about 8% annual compounded growth on your money.
year to year it's risky, but over 10 and 20 year periods the stock market is very safe if properly diversified.
what does that mean for large sums - well wihdrawing a set PERCENTAGE of the total every year - not a set amount - will maintain your wealth and allow you to continue to outpace inflation.
long term inflation is 3-4% - assuming 8-9% on a WELL diversifed equity only portfolio, that means that a million cash withdrawing about 6-7 % will provide about $65,000 a year income adjusted to inflation every year for life - with some flucation up and down on the year depending on how good or bad the year was.
what does that mean - a lot more money than I was hoping to put away - in other words more work for longer till i retire
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