Re:Hard-won lessons about money and investing
by YZF on Sunday November 30, 2014 @04:41PM
(#8678229)
It would never really make sense. Any investment where you can make 5% after inflation has risk involved. If you're lucky you'll do great. If you're unlucky not so much. "Do you feel lucky punk?" ;-)
1999 - 2009 negative real return. Imagine you're the happy dude who retired in 1999 with a family after working for 10 years and diligently saving. Now in 2009 you need to send your kids to school... We also were on the brink of real depression, if that scenario played out you'd be completely wiped.
So basically you need a large buffer than you think you do to account for volatility and rare "tail" events.
1999 - 2009 negative real return. Imagine you're the happy dude who retired in 1999 with a family after working for 10 years and diligently saving. Now in 2009 you need to send your kids to school... We also were on the brink of real depression, if that scenario played out you'd be completely wiped.
So basically you need a large buffer than you think you do to account for volatility and rare "tail" events.