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04-17-2013, 10:41 AM
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#1
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Thinks s/he gets paid by the post
Join Date: Nov 2012
Location: Madeira Beach Fl
Posts: 1,403
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CNN.MONEY Article Today
CNN Money article:
Building wealth: Best moves if you're 25 to 34 - Get with the program (7) - Money Magazine
THE POWER OF AN EARLY START
How much you'd have at 65 if you save $5,000 a year from ages:
25 to 35: $602,100
35 to 65: $540,700
25 to 65: $1.1 Million 
N ote: Assumes 7% average annual returns. Source: J.P. Morgan Asset Management
__________________
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"A man is a success if he gets up in the morning and goes to bed at night and in between does what he wants to do" --Bob Dylan.
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04-17-2013, 02:48 PM
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#2
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Recycles dryer sheets
Join Date: Sep 2012
Posts: 62
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And if return is negative real, like currently expected on most bonds?
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04-17-2013, 02:53 PM
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#3
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
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 Quote:
Originally Posted by heeyy_joe
Note: Assumes 7% average annual returns. Source: J.P. Morgan Asset Management
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That's a real kicker inthe fine print. And they left out "real" when describing the projected returns.
If I could count on that, my annual "take" would be sweet!
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04-17-2013, 06:54 PM
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#4
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Apr 2004
Location: South Texas~29N/98W Just West of Woman Hollering Creek
Posts: 6,673
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Early makes it easy.
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Part-Owner of Texas
Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx
In dire need of: faster horses, younger woman, older whiskey, more money.
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04-26-2013, 05:37 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Sep 2010
Location: midwestern city
Posts: 4,061
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There is little doubt that the earlier delayed gratification is, the better the final result will be.
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Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
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05-16-2013, 07:25 AM
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#6
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gone traveling
Join Date: Feb 2008
Posts: 510
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I'm guessing $1.1mln is in Future dollars?  
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05-16-2013, 07:36 AM
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#7
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
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The assumption (7% real annual returns) is pie in the sky, but the underlying math still works the same way for more "sane" projections like 4-5%. It's just not as huge a difference, but still substantial.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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05-16-2013, 07:41 AM
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#8
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Recycles dryer sheets
Join Date: Apr 2010
Posts: 273
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Ah, the magic of compound interest. My father gave me a sheet of paper when was in college that should I could have an equal pot of money at 65 if I saved $2k/yr from 22 to 30 (I think) to if I saved from 32 to 65. This was back when 12% wasn't so crazy.
He made the point that you shouldn't stop at 30, too.
It actually had a pretty big impact on me.
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05-16-2013, 07:56 AM
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#9
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gone traveling
Join Date: Feb 2008
Posts: 510
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Quote:
Originally Posted by ziggy29
The assumption (7% real annual returns) is pie in the sky, but the underlying math still works the same way for more "sane" projections like 4-5%. It's just not as huge a difference, but still substantial.
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I missed this part...it's a stark difference from Mr. Pfau's prediction of 2-2.5% real return for the future. JPM is VERY optimistic, maybe they mean their own fee structure 
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05-16-2013, 08:18 AM
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#10
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
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I think 2-2.5% long term is too doomsday, really. For a 25-year-old who has an age-appropriate AA for retirement savings (at least 75% in equities, let's say), if all we can get is 2.5% real growth for 30-40 years, frankly we're pretty doomed and a comfortable retirement is pretty low on the list of our concerns.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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05-16-2013, 09:14 AM
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#11
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gone traveling
Join Date: Feb 2008
Posts: 510
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Quote:
Originally Posted by ziggy29
I think 2-2.5% long term is too doomsday, really. For a 25-year-old who has an age-appropriate AA for retirement savings (at least 75% in equities, let's say), if all we can get is 2.5% real growth for 30-40 years, frankly we're pretty doomed and a comfortable retirement is pretty low on the list of our concerns.
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I really hope he's wrong and I don't think about his said 2.5% real growth because I'd get depressed.
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