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In reply to the discussion: Dow sinks 700 points as Delta variant fears hit Wall Street hard [View all]JT45242
(2,267 posts)I work for a non-profit and have money in a variety of index funds and other managed funds.
Over the last 10 years my accounts have averaged over 12% return. Over the last 60 years the stock market averages growth at about a 7-10% every decade. Which means using the rule of 72, that every decade families that use managed funds will double their investment.
My brother lost literally hundreds of thousands dollars day trading the profit from selling a Brooklyn home and moving south for a job. That was gambling and he cost himself working an extra 4 or 5 years to make that money back.
I will let my money ride in these accounts and when I reach retirement age I should be able to withdraw 5% of the 403B and never touch the principal in a significant way (a bad year I might, but when the bounce comes back, it'll come back).
Using the stock market, managed by professionals and computer indices, instead of savings or bonds that make less interest than the inflationary rate is a way to grow generational wealth.