News for hackers. Stuff that matters.

A comment on Want to get rich? Don't pay off your student loans. Parent comment

Re:Want to get rich? Don't pay off your student loans by YourCupOTea on Monday December 22, 2014 @03:28PM (#8785006)
You aren't including dividend reinvestment and you are looking at the wrong time frame for the quoted percentage.

-5.65% from 1/2000 to 1/2010 with dividend reinvestment

+89.85% from 1/2000 to 12/2014 with dividend reinvestment

The annualized returns are generally over rolling 30 year periods. which 12/1984 to today is 8.79% without reinvestment or 11.32% with reinvestment of dividends.

http://dqydj.net/sp-500-return-calculator/

[ Parent | on HN ]
Re:Want to get rich? Don't pay off your student loans by dragontamer on Monday December 22, 2014 @04:34PM (#8785385)
Dividends are taxed at your income btw. So these values only make sense inside a tax-advantaged account.

They'll be a bit lower once you factor in taxes, which can be a sizable chuck (especially because that tax difference "compounds" year over year in the reinvestment case)

[ Parent | on HN ]