Re:The Simple Math Behind Early Retirement
by muzz on Friday January 18, 2013 @01:20PM
(#5080095)
> Why buy stocks and bonds when you can buy a house that pays $500/mo rent on a $5000 purchase?
500/mo * 12 mo = $6000 a year. At $5000 investment that's a return of 120%, as another commenter pointed out.
Why invest in anything at less than 120% return?
Either a) you've discovered some capital allocation inefficiency, i.e. trillions of $$$ are being foolishly allocated into places like stocks and bonds when higher returns obviously exist or b) you don't fully appreciate the risks that come with the 120% annual return
(I guess there is another option, that the scenario doesn't exist, but I'll take your post at face value and assume that it does.)
500/mo * 12 mo = $6000 a year. At $5000 investment that's a return of 120%, as another commenter pointed out.
Why invest in anything at less than 120% return?
Either a) you've discovered some capital allocation inefficiency, i.e. trillions of $$$ are being foolishly allocated into places like stocks and bonds when higher returns obviously exist or b) you don't fully appreciate the risks that come with the 120% annual return
(I guess there is another option, that the scenario doesn't exist, but I'll take your post at face value and assume that it does.)