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Old 08-09-2017, 06:49 AM   #21
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If you've ever seen the American Funds charts of how $10K would have accumulated in various funds over 30 years, they're impressive- they have to use a logarithmic scale to get it on a decent-sized page!

The 80s were a bit of a blur to me. I saved the first half of that decade- even had an account at Merrill Lynch but, as mentioned earlier, no 401(k) and commissions on stock trades were steep. Then I met the man who would eventually become my first husband. What a financial disaster. His credit was in the toilet, he spent more than he made, he had WAY more"wants" than he could afford. I spent every spare dollar I had propping him up. Why? Blame it on my biological clock. We did eventually marry and that produced DS (who has given me a wonderful DIL and my beautiful granddaughters). I'm ashamed to list all the stuff I spent money on to pacify him (but let's start with taking on a $10K car loan in 1983 so he could buy a loaded Camaro).

So, I wasn't adding much new money to my savings back then and actually drew some down. I am where I am today because of some subsequent good breaks (especially profits on 2 primary home sales) and generally sound decisions. The years of sky-high returns were also years of rampant inflation. As I've discovered from my own modeling in Excel, the most important variable is not the investment return rate or the inflation rate- it's the delta between the two. If you're making 12% but inflation is 8%, you're not much better off over the long run than if you're making 6% and inflation is 4%.

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Old 08-09-2017, 11:55 AM   #22
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Originally Posted by athena53 View Post
If you've ever seen the American Funds charts of how $10K would have accumulated in various funds over 30 years, they're impressive- they have to use a logarithmic scale to get it on a decent-sized page!

Those were the glory years for American Funds. IIRC They were number 2 in AUM back then.

I was w*rking rking at a place they outsourced some of their IT to. Their systems were very challenging to support due to very high volumes.

The team I was on was challenged to come up with unique solutions to sustain their loads. Interesting times, probably the best parts of my career.

Who would have thought that running out of resources you had to pretend existed was possible? Or fixing the imaginary problems would lead to career advancements? Haha pretty funny now. We worked a lot of late hours fixing imaginary problems.

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Old 08-09-2017, 05:58 PM   #23
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After the dismal stock market of the '70's, I gradually invested primarily in municipal bonds during the '80's. it was pretty tough to turn down 6% or more tax free. I eventually returned to equities but missed some of the equity rally that followed.
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Old 08-09-2017, 06:09 PM   #24
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The returns didn't seem to be that big. We started investing in the early '80's. You could get 12 or 13% on a 6 month CD at that time. There were big returns for a lot of the years in the 80's and 90's. But to us, even though the percentages were high, the amount of real $$ gained was not so big since the total invested was not so big. In a lot of ways, high returns were kind of the normal. Plus it was just money on paper and retirement was years and years away.
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Old 08-09-2017, 10:15 PM   #25
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Yes, I invested... but the big problem is that I did not make much... my first job out of college was '83 and I made a bit over $23K....

The limit was $2,000 when I started... so that means a whopping $14K put aside for the whole decade... the rest was spent...

So even if I had a great year in returns, it was so low a balance it did not matter.... no AA change as I was 100% into stocks and was that way for more than 30 years...
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Old 08-11-2017, 11:10 AM   #26
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My 403b retirement account started in 1986 and contributions ended in 2009. I started with about 90/10 AA and ended with about 50/50 AA. Due to Sequence of Returns, my average annual return was only about 2.5%. Since I haven't begun making withdrawals, the rate of return has changed dramatically.

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