Andre1969
Thinks s/he gets paid by the post
LOL, same here. Although for me it's not that numbers I have a problem with, it's the idea of being forced into it. If someone wants to work until they're 70, and enjoys doing it, I say have at it. And if they only want to live off of 3% for whatever reason (good pensions/SS, wanting to leave an inheritance, etc), again, go for it. If that's what someone wants to do, as long as they're in good health to where they can keep working that long, and don't run into big healthcare problems, they'll be just fine.
But to me the terror is being forced into that scenario, when you really don't want to. And I think Suze Orman sometimes goes the scare-mongering route, making people think they HAVE to work that long, and live off of that low of a rate.
I never thought I'd have to work until 70, myself, mostly because all of my grandparents, and relatives of their generation, retired in the 55-60 range, and then only worked in later years if they wanted to. My grandparents also taught me the idea of saving at a fairly early age, and both of my Granddads told me that I should look into something other than just savings accounts, CDs, etc.
One of my Granddad's gave me some money/finance magazine back around 1991. I remember looking through it, and one article was about some high performing mutual funds. I think the #1 in that article was 20th Century Ultra, which did 20%+ the year before. I did the math, and seem to recall that if you put $1,000 into it, and it made 20% every year, you'd hit $1M in 37 years or something like that.
Of course, no fund is going to return 20% consistently every year. And then there's taxes, inflation, fun stuff like that. So logically, I knew that scenario wouldn't play out. Yet at the same time, the idea of taking an amount so small, and turning it into that fascinated me, and I also knew I wouldn't just put in $1K and forget it, but would rather keep investing, as I was able.
I can still remember, telling one of my younger friends, who was 18, about investing, and using that scenario. He totally blew it off. However, his dismissal wasn't about how unrealistic that scenario was, but rather along the lines of "So what? I'd have to wait 37 years for that $1M, and I'd be an old man!" I guess some people just aren't wired for long term thinking.
Anyway, it was the fall of 1991 that I made my first mutual fund investment. I went with 20th Century, but screwed up and bought their Growth Fund, instead of Ultra. I bought $1500, at $21.24 per share.
I don't know what that initial $1500 would have grown to today. I know it was nowhere near 20% annually. I just looked online, and as of the last close, it was at $44.93 (It's now American Century Ultra). But, there have been countless distributions, capital gains, etc over the past 30 years. Plus I've bought more, sold some, and so on, and today it's only a small part of my portfolio.
As for total invested assets, I slipped above the $1M mark in February of 2015. Naturally, it took a lot more additional investing to get there, and inflation had taken its bite, but it still felt pretty good. As for my friend, we had a falling out back in the early 90s. I heard he joined the Navy, but screwed up and got kicked out. And then I heard he carjacked someone with a toy gun in 1995, went to prison for a few years. I talked to him on the phone, maybe once, since he got out, but that's probably been a good 20 years.
Anyway, I guess there's a lesson or something in there, like perseverance pays off, but carjacking doesn't! Your mileage may vary.
