Life insurance

[exNavyOffRec]

I get 9%+ over the past 20 years

When I started my civilian job I started putting money away and to estimate returns I went with 10%, if I stay on track (employed) I should be very happy when I retire (again). I have had tried to be more aggressive at it so I can make up a bit for what I didn't do when I was younger.

 

[utswimmer37]

the report I attached is from Morning Star(for premium user only). I'm currently playing with peer-to-peer lending, give me 8.24% after fees.

yeah about dead balls on my calc, excluding fees

 

[utswimmer37]

When I started my civilian job I started putting money away and to estimate returns I went with 10%, if I stay on track (employed) I should be very happy when I retire (again). I have had tried to be more aggressive at it so I can make up a bit for what I didn't do when I was younger.

the market is a tricky game, when it bites it you lose big and when the market feels like giving back it's extremely rewarding. it's hard to gamble when trying to figure out ones future and hedging the risks of life 10 different ways but it is what it is. best of luck to everyone and their respective decisions...back to waiting for an OCS date

 

[xltn]

It's not really tricky. The market includes Mr. Market and Mr. Value. I always tell this to people who thinks they want to invest in the stock market, only invest if you invest at least 10yr (most finance people will tell you 5, but I'm more conservative). I've been studying about the history of the stock market, history never repeats itself, but it rhymes. There is no 1 plan fit all, depend on each individual.
Also, if you're still young and interested in finance, read Winning The Loser's Game by Charles D. Ellis (believe the latest edition is 6th)

 

[Spekkio]

I disagree. This is the annual return of from 1996-2013 (from left to right) for Large stocks, small stock, long-term corp bonds, LT gov. bonds, treasury bills, Inflation.
http://i60.tinypic.com/2zhf7sn.jpg

2014 - 1996 != 15.

It's easy to bounce back from that in your 20s/early 30s. If that 15 year 3% before-inflation return hits when you are, say age 40 up to age 55, you're going to have a bit of a conundrum with how you manage your portfolio 10 years out from retirement.

 

[exNavyOffRec]

2014 - 1996 != 15.

It's easy to bounce back from that in your 20s/early 30s. If that 15 year 3% before-inflation return hits when you are, say age 40 up to age 55, you're going to have a bit of a conundrum with how you manage your portfolio 10 years out from retirement.

I hope the next 18 years are as good.

 

[xltn]

2014 - 1996 != 15.

It's easy to bounce back from that in your 20s/early 30s. If that 15 year 3% before-inflation return hits when you are, say age 40 up to age 55, you're going to have a bit of a conundrum with how you manage your portfolio 10 years out from retirement.

It's true, and I understand. However, if you have been passively investing early,you're in great shape. Look at the stock market as a longterm investment. Just for fun:
Wealth indices of investments in the U.S. Capital markets Index (yr end 1925=$1.00)
Yr end 2013:

• Small stocks=$26,641.17
• Large stocks=$4,676.88
• LT Govt Bonds=109.14
• T-Bills=$20.58
• Inflation=$13.00

You get the point. Assets Allocation also really important

I hope the next 18 years are as good.

I hope so, but I expect at least 1-2 crashes.

 

[Spekkio]

You get the point. Assets Allocation also really important ... I hope so, but I expect at least 1-2 crashes.

I get the point. I'm just saying that when doing this financial planning, looking at stock market performance before you started working, let alone before you were born, is fairly irrelevant. The economy in 1925 is not the same as it is today. I often see people throw around the 8% historical growth number like that return is guaranteed and you'll get rich by just putting a couple hundred dollars into an IRA. Well, if you started working in the 21st century then it's not guaranteed -- not even close.

At the rate of return and rate of inflation for the last 10 years, I'd have to invest $18k a year for 30-35 years to retire on a present-day $50k/year salary over 15 years. I certainly would never get there by just maxing out a $5,500 IRA and putting $3600 into traditional TSP.

You said it yourself -- after a good 2013 now everyone is expecting the market to crash any day. Yet from Jan 2001 to Jan 2013, the stock market grew at less than a percent when adjusted for inflation. Also thanks to a healthy dose of quantitative easing, bond performance is practically 0 return. You might as well have just spent the money.

 

[xltn]

You're right. I'm saying based on studies, and experiences from old Wall street guys. May be I need to experience my own down the road. However, I'm confident in a brighter future.

We are not expecting the market to crash after 2013, we're expecting a correction (10%-20% down)
I'm just expecting the market to crash 1-2 time within that 18 yr period because of what history is showing, and also because the market is growing at a non-sustainable rate.