You are so full of ****ing shit,You're the guy who sold Wal-mart stock to buy a lawn tractor.
Real fact if you invested a one time investment of 10% of your salary in 1965 in Berkshire-Hathaway and never touched it that one investment would be worth today an
paltry AKA chicken scratch, amount of $10.4M. with no dividend payments
If you invested just $1600.in Walmart (100 shares) in 1970, todays value after splits would be about $12.4M with an annual dividend of over $400k.
In 1980 an investment of less than $1K (24 shares) in Kimberly Clark would be worth $1M today and $3.88 dividend on 886 shares ($3500).
All of these investments are not out of reach on the average school teachers salary, even in 1965.
I think you can see that putting your savings in Cap Fed and earing 6.5% is going to have you eating out of a soup kitchen when you get old, but investing in dividend growth stocks will have you eating caviar with Robin Leach on your own yacht without touching your investment...
Go ahead. School me, I gotz 2 knwz!.
Quote:
Originally Posted by Fat Elvis
I don't think you understand how compound interest works. Lets go ahead and assume that your data is correct and that the average wage in 1965 was $6,900. An average person would still have to save 72.5% of their income in 1965 to make a $5,000 annual contribution to their retirement account hoping to get a 6.5% return on their money over 45 years to get the $1.4M for retirement. I'm willing to bet just about any amount of money that next to no people saved 72.5% of their income and put it towards retirement.
It is simple math. And if you can't do the math, just google "compound interest calculator" and plug the numbers in for yourself.
You also state that $6,900 in 1965 is the equivalent of ~$53,600 today. By that measure, if you are wanting the same purchasing power of $1.4M today 45 years from now, you need to be saving $38,753 every year for 45 years at a 6.5% annual compounded return. I really doubt a whole lot of Americans are doing that today (and I am pretty sure you aren't socking away that much money for retirement per year).
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