Re:Generation X Stymied by Baby Boomers Refusing to Give Up ...
by lionhearted on Thursday September 15, 2011 @12:32PM
(#3000983)
Extremely good comment, just a minor important point here -
> Basically plan for 4.5% ROI
Warren Buffet notes that a nation's ROI overall basically can't exceed its GDP growth for an extended period of time. So if your country has a 1% to 3% growth rate and you're investing in an unsophisticated way, then 4.5% might be optimistic.
(It's still a thoroughly good idea to do the rest of your comment. I'd save most of my income even if my ROI was -10%, because money is more useful in large quantities, especially when you break certain thresholds like "can take 2-3 years off work when it's a good time to do so" and "can mix cash and and labor when joining a company to get a big equity stake" and "can buy tools and gifts without even looking at the cost if there's a productivity benefit" - cash is more useful/leverageable in large numbers than small for most middle class-ish people.)
Re:Generation X Stymied by Baby Boomers Refusing to Give Up ...
by rayiner on Thursday September 15, 2011 @01:09PM
(#3001150)
1-3% is real GDP growth rate, net of inflation. With inflation at 2-3%, then planning for 4.5% growth, not adjusted for inflation, is not unreasonable.
> Basically plan for 4.5% ROI
Warren Buffet notes that a nation's ROI overall basically can't exceed its GDP growth for an extended period of time. So if your country has a 1% to 3% growth rate and you're investing in an unsophisticated way, then 4.5% might be optimistic.
(It's still a thoroughly good idea to do the rest of your comment. I'd save most of my income even if my ROI was -10%, because money is more useful in large quantities, especially when you break certain thresholds like "can take 2-3 years off work when it's a good time to do so" and "can mix cash and and labor when joining a company to get a big equity stake" and "can buy tools and gifts without even looking at the cost if there's a productivity benefit" - cash is more useful/leverageable in large numbers than small for most middle class-ish people.)