7% is already inflation adjusted, you should be using 10% if you are going to add in inflation after the fact. You are adding double inflation in this calculation. In 30 years you will actually have 1.7 million dollars, but it will have the purchasing power of 1 million of todays dollars, assuming 3% average interest rate.
Correct. The 7% return is already inflation-adjusted for a typical 100% American stocks portfolio.. As someone who supposedly worked earlier in the investment industry, he should know this. *Unless he is talking about a portfolio containing 50% bonds and obligations. Then the return has been way lower. Still, he should have clarified.
You missed at 1:15 that he mentions getting the 7% from being invested in stocks and ‘bonds.’ The bond portion pulls your return down. Or, maybe he’s being really conservative on the return. I switched to 100% S&P 500 about 34 years ago and my return averages just over 10%.
@@EvanKnightIsGood I know the bond portion in retirement is a good idea for most, but it is really a bad idea for the first 25 or 30 years of your career.
VGT is up 1200%! Real Estate requires lots and lots of time and money! You need to factor TAXES/INSURANCE/MAINTENANCE!! If you want Real Estate you better have deep pockets! Plumbing, AC/Heat System/Electrical/upgrades!!! It's never ever ending! Sold my 3 properties and invested in good blue chip companies and ETFs! I make more money with way less headaches!
The way I think about it - as an appraiser, realtor, and homeowner - is that the S&P 500 does its own maintenance. Houses don’t. When a company underperforms, it gets dropped. When your roof underperforms, you’re out $15k.
I lost a lot chasing individual stocks and I feel pretty stupid for not understanding how investing works. I have a double major in economics but I’ve been trying to make sense of the market. Suggestions would be appreciated. Well done on profits!
Finding FAs like Becky lou Gordon who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
You're correct that we need to have realistic expectations, but... As a younger person, the opportunity cost of NOT investing is much higher for me than fees. Inflation will still cut into the profitability, but at least my money is likely to outgrow it in the stock market.
Compounding is one part of a strategy. There is no magic formula. Very few of us have that miracle year in their careers that they make so much money that it makes up for what they didn’t save over the previous 30 years. It’s about starting small and being as consistent and disciplined as life allows. Inflation is part of life. Fees and commissions are part of life. Everyone working needs to eat up and down the food chain. Taxes exist. The governments need to function and they do that by taking a percentage of our income. Just be as disciplined and as consistent as possible. Don’t obsess and worry and deprive yourself of living your life.
All point making sense but i woild like to say tlfew things i hope you can comment on: - inflation: is physiological it's there even if of you invest or not - taxes: unless you keep money into bank you are going to pay tax anyway in a way or in another in the exact moment you spend it. - return: over a 20 years period of time on balacned portfolio there almost zero chance to loose money. My conclusion is that investment won't make you rich but sure is better than nothing
I lost over $80k when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that's what everyone said. I'm still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I'm really grateful I found one source to recover my money, at least $10k profits weekly. Thanks Charlotte Miller.
She is my family's personal broker and also a personal broker in many families I'm United States, she's a licensed broker and a FINRA AGENT in United states
I'm celebrating a $30k stock portfolio today. started this journey with 6k. I have invested on time and also with the right terms now I have time for my family and the life ahead of me
I just withdrew my profits a week ago, To be honest it was an amazing feeling when the profits hits my wallet I wish I could reinvest but, too much bills
With the current market volatility, I'm trying to balance between traditional stock investments and alternatives like Bitcoin, which has seen a significant rise recently. While tech stocks like NVIDIA remain promising for long-term growth, I wonder if diversifying further into crypto or other asset classes might help hedge against economic uncertainty. What's your take on balancing these in a portfolio?
Absolutely, having a solid plan is crucial. My portfolio has doubled since early last year. My financial advisor and I are working towards a seven-figure goal, though it might take until Q3 2024.
This talk always reminds me of those radio shows where the financial expert talks about all the risks of 401k's, mutual funds, taxes, and the scary future depression on the horizon. The person never says what the financial product they are trying to sell you is specifically, but promises that you NEVER have to worry about inflation, taxes, or a downturn in the stock market. Only by contacting the person you find out its an annuity product where the person gets an 8 or 10% commision off the money you put in it.
I am awfully late in investing at 33 with just about $80,000 in savings as i have never invested in the stock market. I’m worried about missing out on compound interest and want to make smart choices for my future. If I invest aggressively, can I still retire with at least $1 million by age 65?
Yes, you can. Investing $80,000 in the S&P 500 at an 8% annual return will grow to about $805k in 30 years. Financial advlsors can achieve 10-15% returns, so do your research and consider consulting one.
You have a very valid point, There are tons of benefits to having a financial advlsor, but here’s one example: My advlsor based a small part of my portfolio on Nancy Pelosi’s portfolio, which is completely legal. That portion has gone up 71% in just six months-take that info as you will.
I'm intrigued by this. I've searched for financial advlsors online but it's kind of hard to get in touch with one. Okay if I ask you for a recommendation?
Kimberly Grace Flanagan is the advisr I use and im just putting this out here because you asked. You can Just search the name. You’d find necessary details to work with to set up an appointment.
I'm a young investor amateur with a portfolio of 40k but it's hard for me to build confidence. I want to invest another 20k over a one month span, but I want to be strategic about doing it so I can grow more and not stay stagnant. Any stock suggestions?
Not offering any particular advice, but I can assure you that it's not as hard as many people think it is. Ordinary investors lack the requisite level of diligence, so having a financial advisor on board is usually highly beneficial. In the market, this is how people generate enormous profits.
I agree. There's a lot of potential in the market. My friend introduced me to a financial advisor in 2021, and even though I was skeptical, I went on. I finally was making enough monthly dividend to quit my soulless job and pursue my dream to start a restaurant in New Jersey.
That's really great. I've tried doing some research myself to hire a financial advisor, but it's really overwhelming. Could you recommend who you work with, please?
I've always been fascinated by investing, but when I tried stock investing early this year, it hasn't been as successful as I expected. However, I keep seeing good news about the stock market. Any recommendation will be much appreciated.
As a stock market investor i believe investing can lead to financial freedom by growing your wealth over time. Also having an investment advisor is key in this journey, offering expert guidance and tailored strategies to help you navigate the market and achieve your financial goals. Hoping to diversify more in 2025
The truth is, the role of an investment advisor can often be overlooked but should never be underestimated. After facing a significant portfolio loss in 2020 during the COVID pandemic while trying to manage my investments on my own, I decided to reach out to an investment advisor. At that time, I had about $126K left in my portfolio. Now, without having to lift a finger, I'm semi-retired, working only 7.5 hours a week, and I'm just 15% short of my $1 million retirement goal thanks to my subsequent investments.
Thanks for sharing your experience! I’ve been managing my portfolio myself, but it’s not working out. Do you have any recommendations for a good investment advisor? I could really use some help.
My CFA, Laurel Ann Watkins, is a renowned figure in her field. I recommend researching her name online; you’ll find all her credentials and everything you need to work with a reliable professional. With many years of experience, she is a valuable resource for anyone looking to navigate the financial market. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.
I just looked up her website on google and I would say she really has an impressive background in investing. I have sent her an email hope she gets back to me soon. Thank you so much
The biggest lie from advisors, after speaking to many of them , in my opinion, is that they say "volatility equals risk" and than use that to scare the crab out of investors, to convince them to rely on their mediocre service for protection against risk. Azul, I like your video's and learn from them. I'm a DIY investor that distinguish between risk and volatility. I almost completely avoid risk but embrace volatility and manage to average between 20 and 30% gains per year on my portfolio by using only a couple of ETFs. Risk is the danger of losing money permanently like investing in bonds for the longer term that always results in negative returns after accounting for inflations, or in corporations that's in decline or that go out of business. Investing in rules-based ETFs (for diversification) that automatically eliminate losers and add new winners, can be volatile in the short run, but will return market beating returns over the longer term.
Yes! My employer's 401(k) fund manager sent me a note saying they thought my investments were too risky for my age. I was actually losing money when I was in the funds that they recommended. And that loss was even after my employer's match. Now my nest egg is taking off. Also consider that even if the market does take a turn down, as someone on this thread already observed, you'll be fine as long as you don't need all of your money this year.
Agree. Even when you reach retirement age, you do not need all the invested funds at once. In fact you withdrawal over a period that may be 30 years or longer. In my case I plan to continue to invest in a volatile portfolio (ETFs + little bit of crypto) as this generates on average high gains. In my opinion having high gains is the best defense against inflation. Every situation is different. So what may work for me may not work for others.
one of the richest guy on my country is a true self made man from a very poor background. He was Investor, he does not own a business, rather he just spare his 10% salary there everytime and 20 years later a billionaire. His recipe are so simple yet many did not believe him. it's was his boss at bank who taught him the dca method. I now do the same
Risk means uncertainty about the outcome. That is why volatility = risk. A Treasury bond with a 3% coupon is not risky because the outcome is known with certainty (assuming you hold to maturity). Betting on coin flips is highly volatile and therefore extremely risky even though you know that, statistically, if you iterate many times, you shouldn't lose any money. If you lose it all on one toss of the coin, it doesn't matter that the long-term average return is 0%. Standard deviation of a coin toss (its volatility) is 0.50 and is clearly a valuable measure of this risk. And if it was that easy to beat the market, every analyst would know about, they all would do the same strategy, and that would set the new market. Therefore, that strategy would no longer beat the market. If you ever conclude you are smarter than the tens of thousands of highly trained quantitative genius freaks out there who analyze investments 70 hours a week for a living, you may want to consider whether your confidence is really justified. "If you can't spot the sucker at the table after your first half-hour at the table, you are the sucker."
One way to minimize the anxiety out of stock market investing, is to make sure you keep a large cash cushion. I invest in the market, but never put all my money in market. I have been a dividend focused investor for a long time. This does not mean I don't own growth stocks, I do. A well rounded portfolio should be a mixture of both categories.
I think the next big thing will be A.I. For enduring growth akin to META, it's vital to avoid impulsive decisions driven by short-term fluctuations. Prioritize patience and a long-term perspective most importantly consider financial advisory for informed buying and selling decisions.
The issue is most people have the "I want to do it myself mentality" but not equipped enough for a crash, hence get burnt, no offense. In general, Financial Consultants are ideal reps for investing jobs, and at firsthand encounter, since Jan.2020, amidst covid outbreak, my portfolio has yielded massively in ROI, summing up to 7-figures as of today.
My CFA ‘’Vivian Jean Wilhelm’ a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
She appears to be a true authority in her profession with over two decades of experience. I looked her up on the internet and skimmed through her site, very professional. already sent her an inquiry hoping for a response soon.
I’m retired. Your story of a conservative savings profile is a common one. Any course of action involves risks. You might be avoiding market risk, but you are taking on other risks like inflation and reinvestment risk.
My wife is willing to work for another 5 years if needed. Are we in good shape? Will we be okay if I begin withdrawing from Social Security when I’m 62 and my wife is 67? Should we hire a financial planner to help us navigate this?
Certainly get a pro to look at your predicament (if you even have one, lol) A second opinion from acomprehensive financial adviser can help you look at more than just your current estimate of cash flow and needs but also longevity risk, outliving your money, tax considerations, legacy planning, healthcare costs, inflation and a myriad of other things you may not be considering when reviewing your current situation
It feels like they’re not transparent enough, especially when they push for more aggressive investments without explaining the risks properly. Every time I read about “safe” investments, it feels like they’re just setting me up for failure.
I totally agree. It seems like the industry is designed to make it confusing on purpose. For years, I was promised “guaranteed” returns on certain products, but I’ve learned the hard way that nothing is ever as safe as they claim. I’ve barely seen any growth since I switched to these "safe" investments, and now with inflation going through the roof, I feel like I'm falling behind
I’ve been investing for a while, but it feels like I keep getting pushed into the same cycle, chasing the next big thing. I want long-term growth, but these quick fixes seem to be more common, especially when things get volatile. I need some clarity on what’s really worth it and what I should avoid. Anyone else feeling stuck like this?
It’s tough because there’s so much noise. It’s easy to get swept up in the hype, but what if the advice you’re getting is more about their commission than your actual needs? I’m starting to question if the traditional investment advice is really helping or just adding risk. I want something more reliable.
I’m semi-retired, and like many, I trusted an advisor early on, but I’ve lost faith. Now, I’m managing everything on my own, and while I’m still surviving, I’ve realized that I’m not making nearly the returns I could be. If I want to retire comfortably, I know I need to make a change. Anyone recommend an advisor who’s got a no-nonsense approach?
It took me a while to find someone who truly cares about my financial goals and not just their commission. After losing money in 2020, I sought out Eric Paul Elmer, and it was a game-changer. He didn’t just help me diversify, but also showed me how to protect my investments from market volatility. His advice about avoiding market speculation and focusing on sustainable growth has paid off
The problem with financial advisors is nothing to do with compounding, its all the hidden fees that they aren't forthcoming about, and their failure to manage customer risk appetites, often putting customers in risky portfolios with the potential for big returns, but also dramatic failure. Speaking from 25 years of trusting advisors and suffering big losses. Never again.
This video is all over the place, imho. First compounding isn't what we are told (yes it is) and then jump into sequence of return risk? If I have years to invest and let compounding do it's job then sequence of return risk is least of my worries because I have time. And if you are talking about near or in retirement, then compounding is not in the cards as it is too late for the magic to move the needle. Additionally, the only way fees are a problem for me is if I use a fiduciary to control my money for 20-30 years.
I retired 10 years ago and had emergency funds to last me a few years if there was a major downturn. This allowed me to stay 100% in the S&P 500. In the 10 years since I retired, my fund has more than tripled and I pulled $52K a year for about five years.
disagree on sequence of return risk. If you consider all the possibilities with sequences of returns, you can get into many troublesome scenarios even if you have a lot of time. Lets say all of your major returns happen in the last 5 or 10 years of your total 30 year investment horizon period, you will see it is vastly different outcome $ wise vs having majority returns in first 10 years, even if your average annual return can be same.
The compounding near to retirement is the largest compounding you will ever realise, the larger the pot, the larger the compounding. It’s only on the funds you put in right now that aren’t compounding much.
@@alecdurbaville6355 that is the problem with sequence of return risk. If you returns suck in the last 10 years with huge returns in early years, your ending $s will be way less.
I feel one Of the greatest challenges that we first timers face in the ma rket is that we end up losing all we have, we find it difficult to find ourselves back to our feet. Big thanks to Jasmine Querida. I now make huge profits through her services while still learning to stand on my own
The continuously changing economic conditions in our society have made it necessary for people to find additional sources of income, thus I am looking at the stock market to fuel my retirement goal of $3m
The lowest level in more than a year, year over year inflation was 6.5% in December 2023. Even while inflation followed predictions, many analysts now believe that the inflation peak may have already passed. There is roughly $350k in my portfolio that has to be increased. What is the best plan of action for making money during this recession?
That is accurate! Economic downturns present many opportunities for regular people to begin creating riches from scratch. But, you might need to speak with a qualified financial consultant if you demand an ambitious return.
Recessions are when millionaires are created. When my portfolio experienced a severe decline in April, I was forced to engage an investment analyst. Since then, she has not only made me a profit of over two million dollars but has also taught me how to do it.
Could you kindly leave your investment analyst's information here? Someone mentioned how a couple made $400k during this red season, and I overheard them. I really need some luck.
Big returns comes from investing big. Investing big comes from building conviction, conviction comes from understanding, understanding comes from doing your homework and research beyond surface level.
Investing in the stock market has HISTORICALLY provided higher returns than other forms of investment. According to Morningstar, the average annual return for the S&P 500 index, which measures the performance of 500 large-cap stocks, was approximately 10% from 1926 to 2020.
Accurate! asset allocation is crucial with an Experts guidance. I have 850k in equity, 300K cash earning 5.25 interest, 685k in 401k, 250k cash account, 120k in car assets ( paid off cars) Gold and silver bars. age is 48. My advisor helped me realign my portfolio to my risk tolerance and it boomed overtime.
Talking about a financial market specialist, do you consider anyone worthy of recommendations? I have some money to test the waters now that large cap stocks are at a discount... Thanks
I'm cautious about giving specific recommendations since this is an online forum and everyone situation is unique, but I've worked with “Diana Casteel Lynch” for years and highly recommend her. Look her up to see if she meets your criteria.
I just looked up her website on google and I would say she really has an impressive background in investing. I have sent her an email hope she gets back to me soon. Thanks
To maximize this cycle, focus on growth stocks, small caps, and Bitcoin. As someone pointed out too; Working with a financial advisor can save and make you money. For example, my advisor allocated a small part of my portfolio based on Nancy Pelosi’s investments, which is legal. That portion has increased by 71% in six months.
But, you said 7% in the Beginning! I use the S&P 500 Returns on average 10% and Inflation Averages 3% so, I go with an Annual 7% (and that is Inflation Adjusted!)
@eddenoy321 a lot of brokerage platforms have no fees and the returns you get are net of manager fees. Even with recessions like over covid and the 2008 housing crash, you're doing fine if you just kept investing and didn't pull anything out.
High five! Whenever I watch popular financial TH-camrs, or videos about dividend investing, or whatever, it always ~gives me the ick~ that they don't factor for inflation over time.
It's because a) interest rates given are already inflation adjusted, and b) obviously you should increase your contributions by 3 percent to account for inflation. So £500 a month becomes £515 in year 2, £530.45 in year 2, £546.35 in year 3 etc. In real terms, you're putting the same amount in each year. It's not rocket science.
Your sequence of returns point is incorrect. If over a 30 year period you have two years of +30% and two years of -30% and all other years are +7%, you will always end up with the same amount no matter when the big up or down years occur. The real risk to sequence of returns is having a couple bad years in a row towards the beginning and having to sell for income while you’re down. That will kill your future growth and overall amount.
Biggest lesson i've learnt in 2024 in the stock market is that nobody knows what is going to happen next, so practice some humility and follow a strategy with a long term edge.
Nobody knows anything; You need to create your own process, manage risk, and stick to the plan, through thick or thin, While also continuously learning from mistakes and improving.
Uncertainty... it took me 5 years to stop trying to predict what bout to happen in market based on charts studying, cause you never know. not having an advisor guide me cost me 5 years of pain I learn to go we’re the market is wanting to go and keep it simple with discipline.
My CFA SOPHIE LYNN CARRABUS a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
Thanks for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.
Do you have a video reviewing the cost of working with a financial planner. Specifically working with a fee-based FP. It looks like they can earn commission and fees transactions above and beyond the fee. Thanks
I am a bit confused on his first break down of inflation. The s&p 500 for the past 30 years has returned around 10%. So the 6 to 7% that we account when doing compound interest calculations includes the inflation correct?
Silliness. Growth, inflation, and fees compound exactly the same. Growth minus fees and taxes is net. Net minus inflation is equivalent buying power. It’s a question of how you want to look at it
yah, seriously. It's just growth - inflation = real growth rate. It's not that tough people, this old guy is making it sound way worse than it actually is. Makes me wonder if he was actually good as an advisor when he doesn't mention this at any point...just keeps saying it's bad bad bad.
@@zarroth Spoken like someone who hasn't lived through the inflation of the 1970s, the market crash of 1987, the 1992 recession, the Dot-Com bust, The Great Recession, or other financial calamities.
Here is what you do - get mark to market accounting from IRS. Create an algo to trade and also trade yourself .gains are a lot greater than this. Otherwise - one is screwed just like you mentioned. Better than nothing. But, can be better.
Thanx for the vid , but isn't those pull backs benefitial for long term investors 30y , one can always add to his portfolio and lower his avg cost at a better price specially at the end of the period since one can uave considerable amounts to reinvest
I bought in the covid down beats compounding. Also best to own investments that go up with inflation, shares in food production companies. The energy sector is forever evolving with technology but food production changes so slowly. And everyone needs it!
I often feel helpless when individual stocks, certain funds perform poorly or markets go down because as an individual investor most micro macro economic factors are completely beyond my control.
What he is pointing out is 100% accurate! But he also spoke about mindset, When I was first taught dividend investing, I was told to only use money I wouldn't miss so my portfolio is pretty much risk free for losing money in that aspect. What I am saying is, I am not depending on my porfolio alone to support me after retirement. And I think people should have the mindset to have multiple ways other than just stocks to retire with as a security blanket.
All I need to see is the boiler plate ads on Schwab extolling the benefits of trading - in particular ads encouraging trading by seniors to know that none of these people can be trusted . They either don’t know what they’re talking about or don’t know they don’t know.
You have to take in the fact that over time the value of a stock if selected properly will increase on value, if I bought coke at £100,000 at the buy in of £20 that was about 20 years ago and just left it, the value of coke has risen to £60 a share so now I'm worth at least £300,000, that's without reinvesting dividends or adding on, just leaving it will grow over time.
Most return rates use the inflation adjusted total market index (5%) or S&P 500 (7%). So technically, that 1 million dollars is in today's 1 million dollars.
@azul But you also count with 10k every year and don`t increase it with inflation. So you also invest less and less... So you cannot compare 1.000.000 dollars to todays value. No?
I was under the impression that negative returns in the early years was more harmful than in later years. I understand that a downturn of 30% on a large portfolio is bad but it wouldn’t be a large portfolio unless there were not early years of negative returns.
Its all about the calculation The costs: 30 years of investing 10.000$ annually is sum 300.000$ invested over that period 300.000$ with 3% inflation yearly in todays money is 123.596,03$ The gains: 1.000.000$ in year 30. Today is 411.986,76$ with 3% inflation Which leaves a net profit of + 288.390,73$ in todays money Now it just leaves questions: Is the inflation gonna be 3% approximately in a 30 year span ? Is the snp gonna give out 7% annually (6,9something%) ? Ect...
7:05. You’re 100% right. The market (S&P500). Doesn’t return 10% annually. In fact it almost never returns just 10%. In reality it is like +18%, then +22, then +2, +18, -28, +15.
Truth is you have got to invest when it hits that’s -28% for proper returns. You can always index etf your way through for a rough 10% return which is very respectable. But if you want proper gains then you have to be vigilant keep monitoring and DCA your winners. If you want to plonk 100k and leave it there to work passively, that’s fine, or you can actively monitor and add when you feel things are low.
Excellent episode. Sometimes i feel compound return long term stock investment concepts are sold without mentioning the reality of risk element, just to attract more people buying into stocks so that those in position already, will have their assets elevated thanks to new source of demand
Not sure I fully agree with your take on compounding. It is a very strong effect. I know your point was that inflation/fees/taxes eat strongly into the actual real number you have at the end, but your example biases the amounts lower. The main culprit being the flat 10K contribution over 30 years and not even increasing that with inflation, when realistically people who do seriously save for retirement increase their savings well over the inflation amount over the years.
Out of all the variables he mentions, the only one the individual investor has no control over is inflation. Every other one is determined at least in part by individual decision-making. Let the industry lie - I don’t care. I don’t rely on experts anyway. A self-taught investor of reasonable intelligence, with an internet connection can manage their own informed decisions.
I think the biggest miscommunication is simply projecting future corpus say after 30 years with x investment and y returns but not telling what will be the actual value of that corpus after 30 years.
I saw a professor talking about Bitcoin and explaining the Fed Govt increases the money supply by 10% while the S&P500 returns around 10% a year. So basically, you're just breaking even in terms of dollar value. Scary stuff.
Sir, thanks for the video. Just want to include that wouldn't using a 7% already account for inflation? The S&P 500 has return an average of 10.39% over the last 60 years.
What you're saying is, it's a crap shoot! Like I always thought it was. There are no real answers when it comes to retirement counting on the stock market. It's a scary way to retire, that's why so many people keep working into elderly age and beyond because it is so scary. Fear of running out of money.
When they say 7% is because the inflation is discounted. If you want to consider the inflation, the compound is calculated with 10% (average s&p 500 growth). I am not defending if it true or not. Just saying the values.
I assume a 2-3% annual growth rate after accounting for inflation, and also a 25-35% drop in the market at the time of retirement (sequence of return risk). I also simplify things by assuming social security benefits will be 70% or lower and that all income will be taxed at the regular income level regardless of source. Tax rates may be higher. This might seem rather pessimistic, but I'll be mentally prepare if we don't have enough to retire, and very excited if we end up having more than expected. Either way, its not like this will all happen overnight. We'll know if things are looking good the closer we get to the time. If all else fails we relocate to a different country.
What about the bubble we are in? Just ride it out? What about when the macd is rolling over? The rsi says way over brought. Seems obvious. If not, buy a cd and watch oldies
A lot of that depends on where you are in life, and how much income you need from investments. A person in a low cost of living area, that is retired with a part-time job and Social Security, might be fine with CDs. Not everyone needs to be in the market all of the time.
The key to investing is starting as early as you can and staying the course correctly right off the bat. I have my teenagers in VTI saving $100/mo each. If you start early enough and you start with the right broad market index fund and you continue to dollar cost average over the years there is no reason in the world that you shouldn't have at least a million dollars by the time you retire. Everything else they throw at you is mumbo jumbo and it doesn't matter.
But, you also adjust your input every year by the inflation percentage. Atleast, and it should even be more because you climb the career ladder. And really, what is 10 or 15k for someone which is actually making good money. If you make less, your priorities will always be having a house first. Whatever you do, don’t become a rent slave.
I retired 20 years ago. That chart you see where 10k a year makes you a millionaire seems to omit the reality of frequent downturns in the market. One question I’ve never had a potential advisor answer “ If I gave you 500K ten years ago what would the value be today?” Most frequent response “ you have the portfolio my mother has.”
Well the stock market has no guarantee. Most advisors don’t beat the market. Just follow the market. That’s the best way to invest if you don’t have inside information
Most people retire with 200k or less and get by from social security. If you dont spend much during working years and have good money habits. You can retire comfortably at 55 with 600k portfolio in my opinion
I'm always thinking of worst case scenario.. Because of those bad years we've had in. When I look at our accounts, I think Twenty percent less... Except for my emergency fund/cash, metals, old cars etc... Which don't change much.
This need to become generational habits. If you suddenly wake up at 50 and think you will retire a billionaire, then it is already too late. Who knows what the future holds, but we need to stop making finance taboo. Drill it into your kids heads to focus on investments and not cars and mansions. Time in the market beats timing the market.
Thanks! Your video calms me down everyday I watch it when the market is pumping! I'm going with your insights. It makes the most sense with where we are at in the cycle. The only thing that would make me think this cycle could be slightly different is the overall increased adoption of crypto since 2019 and all the hype with the BTC/ETH ETF speculation. Could the market stay held up this cycle by the anticipation of ETFs and the overall awareness that a bull run is coming? The surge is speculated to possibly be the beginning of a massive new uptrend, making it a crucial time for investors to pay attention, I've personally benefited from following Harry’s Dent trading tactics, amassing 33 bitcoins in a short four weeks period, which speaks volumes about his expertise...
Over the years, I've been a part of numerous trading programs, sifting through a barrage of information. Yet, nothing has come close to the sheer clarity, depth, and precision of Harry’s Dent insights.
Before selling new financial products, the financial analyst already calculate long term optimum value or equilibrium value. Therefore, it is made for the seller, not for the buyer.
Okay ... I get the inflation stuff, but the alternative is to do nothing and lose even more purchasing power. It is rare that actively managed stock funds are outperforming the index. So, buy cheap index funds, and add in whatever stocks you believe in yourself.
Taxes, inflation (still a tax), fees, and loss are also compounding. It’s gambling. It’s fiat currency not real money. Scam comes to mind. Honest money would be real investing.
Exactly, this is why in all my projection spreadsheets I can see the effects of fees and inflation. I can see if what is in the account is on track in ‘today’s money’ but I can see what the projected value is in today’s money also. If you don’t do that you can’t make sense of it. Much like a lot of people these days that think if someone has a couple of million they are ‘the rich’ because of all of those ‘be a millionaire’ books written in the 1930s. It’s a trap to be very aware of, particularly, don’t trust pension website calculators, they are vey very misleading. You put in, for example, you would like a starting pension of 25000, that’s enough for your needs. Mistake number one! You then learn you only need to work another 3-4years and you can retire. Fantastic. But that’s not true because to have the equivalent of 25000 in 4 years time your pot is going to need to be larger than that projected. If you run through various scenarios you end up realising you will need a starting pension of 29000 and it will take 7-8 years…
As an investment enthusiast, I often wonder how top level investors are able to become millionaires off investing. I do have a significant amount of capital that is required to start up but I have no idea what strategies and direction I need to approach to help me make over $400k like some people are this season.
I believe the safest approach is to diversify investments especially under professional; guide. You can mitigate the effects of a market meltdown by diversifying their investments across different asset classes such as stocks, etfs etc It is important to seek the advice of an expert.
Review your portfolio with a professional and don't make the same mistakes again. Diversify, as in your stock portfolio, and hopefully consult a professional. The key to building wealth is long term. I learned 30 years ago that you have to keep emotions (rookie) out of your investment decisions at all cost. Now, i've made over 800k in profits from my 350k investment.
My CFA Melissa Terri Swayne , a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
7% is already inflation adjusted, you should be using 10% if you are going to add in inflation after the fact. You are adding double inflation in this calculation. In 30 years you will actually have 1.7 million dollars, but it will have the purchasing power of 1 million of todays dollars, assuming 3% average interest rate.
I thought the same thing
Correct. The 7% return is already inflation-adjusted for a typical 100% American stocks portfolio..
As someone who supposedly worked earlier in the investment industry, he should know this.
*Unless he is talking about a portfolio containing 50% bonds and obligations. Then the return has been way lower. Still, he should have clarified.
You missed at 1:15 that he mentions getting the 7% from being invested in stocks and ‘bonds.’ The bond portion pulls your return down. Or, maybe he’s being really conservative on the return. I switched to 100% S&P 500 about 34 years ago and my return averages just over 10%.
@@glasshalffull2930 Ah I did miss that, that is fair.
@@EvanKnightIsGood I know the bond portion in retirement is a good idea for most, but it is really a bad idea for the first 25 or 30 years of your career.
"All these fishing lures are so brightly coloured. Do the fish like them?"
"Sir, we don't sell to the fish." 😂
No matter what you use, there are already trollers ahead of you so your chances of catching anything are significantly lower!
VGT is up 1200%! Real Estate requires lots and lots of time and money! You need to factor TAXES/INSURANCE/MAINTENANCE!! If you want Real Estate you better have deep pockets! Plumbing, AC/Heat System/Electrical/upgrades!!! It's never ever ending! Sold my 3 properties and invested in good blue chip companies and ETFs! I make more money with way less headaches!
The way I think about it - as an appraiser, realtor, and homeowner - is that the S&P 500 does its own maintenance. Houses don’t. When a company underperforms, it gets dropped. When your roof underperforms, you’re out $15k.
Why not both? Why chose to be poor? Be rich my man?
$1.4 million is poor? Salute my friend!
I lost a lot chasing individual stocks and I feel pretty stupid for not understanding how investing works. I have a double major in economics but I’ve been trying to make sense of the market. Suggestions would be appreciated. Well done on profits!
Finding FAs like Becky lou Gordon who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
You're correct that we need to have realistic expectations, but... As a younger person, the opportunity cost of NOT investing is much higher for me than fees. Inflation will still cut into the profitability, but at least my money is likely to outgrow it in the stock market.
Compounding is one part of a strategy. There is no magic formula. Very few of us have that miracle year in their careers that they make so much money that it makes up for what they didn’t save over the previous 30 years. It’s about starting small and being as consistent and disciplined as life allows. Inflation is part of life. Fees and commissions are part of life. Everyone working needs to eat up and down the food chain. Taxes exist. The governments need to function and they do that by taking a percentage of our income. Just be as disciplined and as consistent as possible. Don’t obsess and worry and deprive yourself of living your life.
All point making sense but i woild like to say tlfew things i hope you can comment on:
- inflation: is physiological it's there even if of you invest or not
- taxes: unless you keep money into bank you are going to pay tax anyway in a way or in another in the exact moment you spend it.
- return: over a 20 years period of time on balacned portfolio there almost zero chance to loose money.
My conclusion is that investment won't make you rich but sure is better than nothing
I lost over $80k when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that's what everyone said. I'm still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I'm really grateful I found one source to recover my money, at least $10k profits weekly. Thanks Charlotte Miller.
She is my family's personal broker and also a personal broker in many families I'm United States, she's a licensed broker and a FINRA AGENT in United states
I'm celebrating a $30k stock portfolio today. started this journey with 6k. I have invested on time and also with the right terms now I have time for my family and the life ahead of me
The very first time we tried, we invested $1000 and after a week, we received $7500. That really helped us a lot to pay up our bills.
I'm new at this, please how can I reach her?
I just withdrew my profits a week ago, To be honest it was an amazing feeling when the profits hits my wallet I wish I could reinvest but, too much bills
With the current market volatility, I'm trying to balance between traditional stock investments and alternatives like Bitcoin, which has seen a significant rise recently. While tech stocks like NVIDIA remain promising for long-term growth, I wonder if diversifying further into crypto or other asset classes might help hedge against economic uncertainty. What's your take on balancing these in a portfolio?
If you're not familiar with market investing tactics, you should get advice from a financial counselor.
Absolutely, having a solid plan is crucial. My portfolio has doubled since early last year. My financial advisor and I are working towards a seven-figure goal, though it might take until Q3 2024.
I could really use the expertise of an advisor like that.
Her name is “Kenia Giordani Borges”. You can research her name to find the necessary details and set up an appointment.
Thanks for sharing. I searched for her name and found her website. I reviewed her credentials and did my research before contacting her. Thanks again.
The fact that inflation acts as a headwind does not imply that compounding in itself is a problem
This talk always reminds me of those radio shows where the financial expert talks about all the risks of 401k's, mutual funds, taxes, and the scary future depression on the horizon. The person never says what the financial product they are trying to sell you is specifically, but promises that you NEVER have to worry about inflation, taxes, or a downturn in the stock market. Only by contacting the person you find out its an annuity product where the person gets an 8 or 10% commision off the money you put in it.
This video is much appreciated, financial advice tends to be redundant and not add perspective from all angles.
I am awfully late in investing at 33 with just about $80,000 in savings as i have never invested in the stock market. I’m worried about missing out on compound interest and want to make smart choices for my future. If I invest aggressively, can I still retire with at least $1 million by age 65?
Yes, you can. Investing $80,000 in the S&P 500 at an 8% annual return will grow to about $805k in 30 years. Financial advlsors can achieve 10-15% returns, so do your research and consider consulting one.
You have a very valid point, There are tons of benefits to having a financial advlsor, but here’s one example: My advlsor based a small part of my portfolio on Nancy Pelosi’s portfolio, which is completely legal. That portion has gone up 71% in just six months-take that info as you will.
I'm intrigued by this. I've searched for financial advlsors online but it's kind of hard to get in touch with one. Okay if I ask you for a recommendation?
Kimberly Grace Flanagan is the advisr I use and im just putting this out here because you asked. You can Just search the name. You’d find necessary details to work with to set up an appointment.
Thank you for the lead. I searched her up, and I have sent her an email. I hope she gets back to me soon.
I'm a young investor amateur with a portfolio of 40k but it's hard for me to build confidence. I want to invest another 20k over a one month span, but I want to be strategic about doing it so I can grow more and not stay stagnant. Any stock suggestions?
Not offering any particular advice, but I can assure you that it's not as hard as many people think it is. Ordinary investors lack the requisite level of diligence, so having a financial advisor on board is usually highly beneficial. In the market, this is how people generate enormous profits.
I agree. There's a lot of potential in the market. My friend introduced me to a financial advisor in 2021, and even though I was skeptical, I went on. I finally was making enough monthly dividend to quit my soulless job and pursue my dream to start a restaurant in New Jersey.
That's really great. I've tried doing some research myself to hire a financial advisor, but it's really overwhelming. Could you recommend who you work with, please?
“Sharon Ann Meny” is the licensed advisor I use. Just research the name. You’d find necessary details to work with to set up an appointment.
Thank you for the recommendation. I'll send her an email and I hope I'm able to reach her.
Finally! Somebody realistic and brave enough to lay it out for everyone to see.
I've always been fascinated by investing, but when I tried stock investing early this year, it hasn't been as successful as I expected. However, I keep seeing good news about the stock market. Any recommendation will be much appreciated.
As a stock market investor i believe investing can lead to financial freedom by growing your wealth over time. Also having an investment advisor is key in this journey, offering expert guidance and tailored strategies to help you navigate the market and achieve your financial goals. Hoping to diversify more in 2025
The truth is, the role of an investment advisor can often be overlooked but should never be underestimated. After facing a significant portfolio loss in 2020 during the COVID pandemic while trying to manage my investments on my own, I decided to reach out to an investment advisor. At that time, I had about $126K left in my portfolio. Now, without having to lift a finger, I'm semi-retired, working only 7.5 hours a week, and I'm just 15% short of my $1 million retirement goal thanks to my subsequent investments.
Thanks for sharing your experience! I’ve been managing my portfolio myself, but it’s not working out. Do you have any recommendations for a good investment advisor? I could really use some help.
My CFA, Laurel Ann Watkins, is a renowned figure in her field. I recommend researching her name online; you’ll find all her credentials and everything you need to work with a reliable professional. With many years of experience, she is a valuable resource for anyone looking to navigate the financial market. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.
I just looked up her website on google and I would say she really has an impressive background in investing. I have sent her an email hope she gets back to me soon. Thank you so much
The biggest lie from advisors, after speaking to many of them , in my opinion, is that they say "volatility equals risk" and than use that to scare the crab out of investors, to convince them to rely on their mediocre service for protection against risk. Azul, I like your video's and learn from them. I'm a DIY investor that distinguish between risk and volatility. I almost completely avoid risk but embrace volatility and manage to average between 20 and 30% gains per year on my portfolio by using only a couple of ETFs. Risk is the danger of losing money permanently like investing in bonds for the longer term that always results in negative returns after accounting for inflations, or in corporations that's in decline or that go out of business. Investing in rules-based ETFs (for diversification) that automatically eliminate losers and add new winners, can be volatile in the short run, but will return market beating returns over the longer term.
Yes! My employer's 401(k) fund manager sent me a note saying they thought my investments were too risky for my age. I was actually losing money when I was in the funds that they recommended. And that loss was even after my employer's match. Now my nest egg is taking off. Also consider that even if the market does take a turn down, as someone on this thread already observed, you'll be fine as long as you don't need all of your money this year.
Agree. Even when you reach retirement age, you do not need all the invested funds at once. In fact you withdrawal over a period that may be 30 years or longer. In my case I plan to continue to invest in a volatile portfolio (ETFs + little bit of crypto) as this generates on average high gains. In my opinion having high gains is the best defense against inflation. Every situation is different. So what may work for me may not work for others.
one of the richest guy on my country is a true self made man from a very poor background. He was Investor, he does not own a business, rather he just spare his 10% salary there everytime and 20 years later a billionaire. His recipe are so simple yet many did not believe him. it's was his boss at bank who taught him the dca method. I now do the same
Risk means uncertainty about the outcome. That is why volatility = risk. A Treasury bond with a 3% coupon is not risky because the outcome is known with certainty (assuming you hold to maturity). Betting on coin flips is highly volatile and therefore extremely risky even though you know that, statistically, if you iterate many times, you shouldn't lose any money. If you lose it all on one toss of the coin, it doesn't matter that the long-term average return is 0%. Standard deviation of a coin toss (its volatility) is 0.50 and is clearly a valuable measure of this risk.
And if it was that easy to beat the market, every analyst would know about, they all would do the same strategy, and that would set the new market. Therefore, that strategy would no longer beat the market.
If you ever conclude you are smarter than the tens of thousands of highly trained quantitative genius freaks out there who analyze investments 70 hours a week for a living, you may want to consider whether your confidence is really justified.
"If you can't spot the sucker at the table after your first half-hour at the table, you are the sucker."
One way to minimize the anxiety out of stock market investing, is to make sure you keep a large cash cushion. I invest in the market, but never put all my money in market. I have been a dividend focused investor for a long time. This does not mean I don't own growth stocks, I do. A well rounded portfolio should be a mixture of both categories.
I think the next big thing will be A.I. For enduring growth akin to META, it's vital to avoid impulsive decisions driven by short-term fluctuations. Prioritize patience and a long-term perspective most importantly consider financial advisory for informed buying and selling decisions.
The issue is most people have the "I want to do it myself mentality" but not equipped enough for a crash, hence get burnt, no offense. In general, Financial Consultants are ideal reps for investing jobs, and at firsthand encounter, since Jan.2020, amidst covid outbreak, my portfolio has yielded massively in ROI, summing up to 7-figures as of today.
Can you share details of your advisor? I want to invest my increased cash flow in stocks and alternative assets to achieve financial goals.
My CFA ‘’Vivian Jean Wilhelm’ a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
She appears to be a true authority in her profession with over two decades of experience. I looked her up on the internet and skimmed through her site, very professional. already sent her an inquiry hoping for a response soon.
We are in our 50s with nearly $3M saved, no debt and $50K annual spending. But we avoid the stock market completely.
I’m retired. Your story of a conservative savings profile is a common one. Any course of action involves risks. You might be avoiding market risk, but you are taking on other risks like inflation and reinvestment risk.
My wife is willing to work for another 5 years if needed. Are we in good shape? Will we be okay if I begin withdrawing from Social Security when I’m 62 and my wife is 67? Should we hire a financial planner to help us navigate this?
No one likes market risk, but without longer retirement, taking on risk is often a necessary evil to compensate for inflation.
Certainly get a pro to look at your predicament (if you even have one, lol) A second opinion from acomprehensive financial adviser can help you look at more than just your current estimate of cash flow and needs but also longevity risk, outliving your money, tax considerations, legacy planning, healthcare costs, inflation and a myriad of other things you may not be considering when reviewing your current situation
How does one get a comprehensive fa who isn’t looking to just make a buck from consultancy and whatnot
It feels like they’re not transparent enough, especially when they push for more aggressive investments without explaining the risks properly. Every time I read about “safe” investments, it feels like they’re just setting me up for failure.
I totally agree. It seems like the industry is designed to make it confusing on purpose. For years, I was promised “guaranteed” returns on certain products, but I’ve learned the hard way that nothing is ever as safe as they claim. I’ve barely seen any growth since I switched to these "safe" investments, and now with inflation going through the roof, I feel like I'm falling behind
I’ve been investing for a while, but it feels like I keep getting pushed into the same cycle, chasing the next big thing. I want long-term growth, but these quick fixes seem to be more common, especially when things get volatile. I need some clarity on what’s really worth it and what I should avoid. Anyone else feeling stuck like this?
It’s tough because there’s so much noise. It’s easy to get swept up in the hype, but what if the advice you’re getting is more about their commission than your actual needs? I’m starting to question if the traditional investment advice is really helping or just adding risk. I want something more reliable.
I’m semi-retired, and like many, I trusted an advisor early on, but I’ve lost faith. Now, I’m managing everything on my own, and while I’m still surviving, I’ve realized that I’m not making nearly the returns I could be. If I want to retire comfortably, I know I need to make a change. Anyone recommend an advisor who’s got a no-nonsense approach?
It took me a while to find someone who truly cares about my financial goals and not just their commission. After losing money in 2020, I sought out Eric Paul Elmer, and it was a game-changer. He didn’t just help me diversify, but also showed me how to protect my investments from market volatility. His advice about avoiding market speculation and focusing on sustainable growth has paid off
The problem with financial advisors is nothing to do with compounding, its all the hidden fees that they aren't forthcoming about, and their failure to manage customer risk appetites, often putting customers in risky portfolios with the potential for big returns, but also dramatic failure. Speaking from 25 years of trusting advisors and suffering big losses. Never again.
This video is all over the place, imho. First compounding isn't what we are told (yes it is) and then jump into sequence of return risk? If I have years to invest and let compounding do it's job then sequence of return risk is least of my worries because I have time. And if you are talking about near or in retirement, then compounding is not in the cards as it is too late for the magic to move the needle. Additionally, the only way fees are a problem for me is if I use a fiduciary to control my money for 20-30 years.
I retired 10 years ago and had emergency funds to last me a few years if there was a major downturn. This allowed me to stay 100% in the S&P 500. In the 10 years since I retired, my fund has more than tripled and I pulled $52K a year for about five years.
disagree on sequence of return risk. If you consider all the possibilities with sequences of returns, you can get into many troublesome scenarios even if you have a lot of time. Lets say all of your major returns happen in the last 5 or 10 years of your total 30 year investment horizon period, you will see it is vastly different outcome $ wise vs having majority returns in first 10 years, even if your average annual return can be same.
The compounding near to retirement is the largest compounding you will ever realise, the larger the pot, the larger the compounding. It’s only on the funds you put in right now that aren’t compounding much.
@@alecdurbaville6355 that is the problem with sequence of return risk. If you returns suck in the last 10 years with huge returns in early years, your ending $s will be way less.
I feel one Of the greatest challenges that we first timers face in the ma rket is that we end up losing all we have, we find it difficult to find ourselves back to our feet. Big thanks to Jasmine Querida. I now make huge profits through her services while still learning to stand on my own
The continuously changing economic conditions in our society have made it necessary for people to find additional sources of income, thus I am looking at the stock market to fuel my retirement goal of $3m
for majority, the solution to their problem can be found in specialized knowledge, so you can as well seek guidance from a well experienced advisor
I could really use the expertise of this advsors
⚠️ SCAM ALERT ⚠️
@@glasshalffull2930 could be
This is a scammer thread I would never use anyone recommended in this disingenuous way.
The lowest level in more than a year, year over year inflation was 6.5% in December 2023. Even while inflation followed predictions, many analysts now believe that the inflation peak may have already passed. There is roughly $350k in my portfolio that has to be increased. What is the best plan of action for making money during this recession?
That is accurate! Economic downturns present many opportunities for regular people to begin creating riches from scratch. But, you might need to speak with a qualified financial consultant if you demand an ambitious return.
Recessions are when millionaires are created. When my portfolio experienced a severe decline in April, I was forced to engage an investment analyst. Since then, she has not only made me a profit of over two million dollars but has also taught me how to do it.
Could you kindly leave your investment analyst's information here? Someone mentioned how a couple made $400k during this red season, and I overheard them. I really need some luck.
Annette Christine Conte is her name. You may look her up online; she is a reputable financial counselor in the US with a license.
I appreciate you sharing this great advice. After researching her, I made a call with her. She oozes professionalism.
This is surprisingly and refreshingly good to hear. This is real insight
Big returns comes from investing big. Investing big comes from building conviction, conviction comes from understanding, understanding comes from doing your homework and research beyond surface level.
Investing in the stock market has HISTORICALLY provided higher returns than other forms of investment. According to Morningstar, the average annual return for the S&P 500 index, which measures the performance of 500 large-cap stocks, was approximately 10% from 1926 to 2020.
Accurate! asset allocation is crucial with an Experts guidance. I have 850k in equity, 300K cash earning 5.25 interest, 685k in 401k, 250k cash account, 120k in car assets ( paid off cars) Gold and silver bars. age is 48. My advisor helped me realign my portfolio to my risk tolerance and it boomed overtime.
Talking about a financial market specialist, do you consider anyone worthy of recommendations? I have some money to test the waters now that large cap stocks are at a discount... Thanks
I'm cautious about giving specific recommendations since this is an online forum and everyone situation is unique, but I've worked with “Diana Casteel Lynch” for years and highly recommend her. Look her up to see if she meets your criteria.
I just looked up her website on google and I would say she really has an impressive background in investing. I have sent her an email hope she gets back to me soon. Thanks
Great video. I especially liked the part at the end where you discussed viable alternatives.
Glad to see someone talking about sequence of return risk. Everyone just says you’ll get 8-12 percent every year like it’s just a straight line.
I have $50,000 in the money market that I want to move into stocks, but I’m scared of buying at the top. Any suggestions?
Stop trying to time the market; it’s far from peaking. Consult a financial advisor if you’re unsure to avoid being others’ exit liquidity.
To maximize this cycle, focus on growth stocks, small caps, and Bitcoin. As someone pointed out too; Working with a financial advisor can save and make you money. For example, my advisor allocated a small part of my portfolio based on Nancy Pelosi’s investments, which is legal. That portion has increased by 71% in six months.
Thank you for the lead. I searched her up, and I have sent her an email. I hope she gets back to me soon.
🤡
@@wealthychronicle-i1u SPAM.
But, you said 7% in the Beginning!
I use the S&P 500 Returns on average 10% and Inflation Averages 3% so, I go with an Annual 7% (and that is Inflation Adjusted!)
These are click bait videos.
Whoops ! You forgot to factor in fees, downturns and Black Swan Events. Of which there have been many. So lop off another 1%. Otherwise, fine job !
At 1:15 Azul mentions stocks and BONDS. So his example portfolio is already handicapped by the bonds dragging it down to 7%.
@eddenoy321 a lot of brokerage platforms have no fees and the returns you get are net of manager fees. Even with recessions like over covid and the 2008 housing crash, you're doing fine if you just kept investing and didn't pull anything out.
High five! Whenever I watch popular financial TH-camrs, or videos about dividend investing, or whatever, it always ~gives me the ick~ that they don't factor for inflation over time.
It's because a) interest rates given are already inflation adjusted, and b) obviously you should increase your contributions by 3 percent to account for inflation. So £500 a month becomes £515 in year 2, £530.45 in year 2, £546.35 in year 3 etc. In real terms, you're putting the same amount in each year. It's not rocket science.
Your sequence of returns point is incorrect. If over a 30 year period you have two years of +30% and two years of -30% and all other years are +7%, you will always end up with the same amount no matter when the big up or down years occur.
The real risk to sequence of returns is having a couple bad years in a row towards the beginning and having to sell for income while you’re down. That will kill your future growth and overall amount.
Hi. A brief question: your examples have inflation, why don't you adjust yearly savings to inflation?
As well as income.
Biggest lesson i've learnt in 2024 in the stock market is that nobody knows what is going to happen next, so practice some humility and follow a strategy with a long term edge.
Nobody knows anything; You need to create your own process, manage risk, and stick to the plan, through thick or thin, While also continuously learning from mistakes and improving.
Uncertainty... it took me 5 years to stop trying to predict what bout to happen in market based on charts studying, cause you never know. not having an advisor guide me cost me 5 years of pain I learn to go we’re the market is wanting to go and keep it simple with discipline.
@@PatrickLloyd- Could you kindly elaborate on the advisor's background and qualifications?
My CFA SOPHIE LYNN CARRABUS a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
Thanks for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.
Do you have a video reviewing the cost of working with a financial planner. Specifically working with a fee-based FP. It looks like they can earn commission and fees transactions above and beyond the fee. Thanks
I am a bit confused on his first break down of inflation. The s&p 500 for the past 30 years has returned around 10%. So the 6 to 7% that we account when doing compound interest calculations includes the inflation correct?
Does sequence of returns matters? Compounded interest is a commutative operation from a mathematical point of view. Am I missing something??
Silliness. Growth, inflation, and fees compound exactly the same. Growth minus fees and taxes is net. Net minus inflation is equivalent buying power. It’s a question of how you want to look at it
yah, seriously. It's just growth - inflation = real growth rate. It's not that tough people, this old guy is making it sound way worse than it actually is. Makes me wonder if he was actually good as an advisor when he doesn't mention this at any point...just keeps saying it's bad bad bad.
@@zarroth Spoken like someone who hasn't lived through the inflation of the 1970s, the market crash of 1987, the 1992 recession, the Dot-Com bust, The Great Recession, or other financial calamities.
So what are you Sir saying is that saving money and invest is not a good thing is not worth it?
Thank you, for pointing this out!
Here is what you do - get mark to market accounting from IRS. Create an algo to trade and also trade yourself .gains are a lot greater than this. Otherwise - one is screwed just like you mentioned. Better than nothing. But, can be better.
Hey Azul
Cheers from Brazil, Fabio Brusasco, big fan. 36 years old and trying to retire at 52. Thank you for the lessons.
Thanx for the vid , but isn't those pull backs benefitial for long term investors 30y , one can always add to his portfolio and lower his avg cost at a better price specially at the end of the period since one can uave considerable amounts to reinvest
I bought in the covid down beats compounding. Also best to own investments that go up with inflation, shares in food production companies. The energy sector is forever evolving with technology but food production changes so slowly. And everyone needs it!
I often feel helpless when individual stocks, certain funds perform poorly or markets go down because as an individual investor most micro macro economic factors are completely beyond my control.
Azul, you presented a problem in this video. Do you have solutions and alternatives also after 20 years of experience?
All good points. Thank you
What he is pointing out is 100% accurate!
But he also spoke about mindset, When I was first taught dividend investing, I was told to only use money I wouldn't miss so my portfolio is pretty much risk free for losing money in that aspect.
What I am saying is, I am not depending on my porfolio alone to support me after retirement. And I think people should have the mindset to have multiple ways other than just stocks to retire with as a security blanket.
All I need to see is the boiler plate ads on Schwab extolling the benefits of trading - in particular ads encouraging trading by seniors to know that none of these people can be trusted . They either don’t know what they’re talking about or don’t know they don’t know.
Everybody wants your money. That's truth.
You have to take in the fact that over time the value of a stock if selected properly will increase on value, if I bought coke at £100,000 at the buy in of £20 that was about 20 years ago and just left it, the value of coke has risen to £60 a share so now I'm worth at least £300,000, that's without reinvesting dividends or adding on, just leaving it will grow over time.
Most return rates use the inflation adjusted total market index (5%) or S&P 500 (7%). So technically, that 1 million dollars is in today's 1 million dollars.
They do?? 😂😂😂😂
@azul But you also count with 10k every year and don`t increase it with inflation. So you also invest less and less... So you cannot compare 1.000.000 dollars to todays value. No?
Always buy a put 5-10% otm to protect your portfolio.
I was under the impression that negative returns in the early years was more harmful than in later years. I understand that a downturn of 30% on a large portfolio is bad but it wouldn’t be a large portfolio unless there were not early years of negative returns.
Its all about the calculation
The costs: 30 years of investing 10.000$ annually is sum 300.000$ invested over that period
300.000$ with 3% inflation yearly in todays money is 123.596,03$
The gains: 1.000.000$ in year 30. Today is 411.986,76$ with 3% inflation
Which leaves a net profit of + 288.390,73$ in todays money
Now it just leaves questions:
Is the inflation gonna be 3% approximately in a 30 year span ?
Is the snp gonna give out 7% annually (6,9something%) ? Ect...
7:05. You’re 100% right. The market (S&P500). Doesn’t return 10% annually. In fact it almost never returns just 10%. In reality it is like +18%, then +22, then +2, +18, -28, +15.
Truth is you have got to invest when it hits that’s -28% for proper returns. You can always index etf your way through for a rough 10% return which is very respectable. But if you want proper gains then you have to be vigilant keep monitoring and DCA your winners.
If you want to plonk 100k and leave it there to work passively, that’s fine, or you can actively monitor and add when you feel things are low.
AVERAGE IS 10%
Excellent episode. Sometimes i feel compound return long term stock investment concepts are sold without mentioning the reality of risk element, just to attract more people buying into stocks so that those in position already, will have their assets elevated thanks to new source of demand
Thanks Azul to explain about these hidden fee that no one talks about. How about invest in Bitcoin?
What’s the alternative to not investing? You’d be even worst off…don’t you think??
Don’t sweat it, either invest or not, don’t overthink it
Is it worth to invest in a global etf if a mil wont be enough in say 30 years ?
Not sure I fully agree with your take on compounding. It is a very strong effect. I know your point was that inflation/fees/taxes eat strongly into the actual real number you have at the end, but your example biases the amounts lower. The main culprit being the flat 10K contribution over 30 years and not even increasing that with inflation, when realistically people who do seriously save for retirement increase their savings well over the inflation amount over the years.
How many people can actually save 10k a year just for investing?
Out of all the variables he mentions, the only one the individual investor has no control over is inflation. Every other one is determined at least in part by individual decision-making. Let the industry lie - I don’t care. I don’t rely on experts anyway. A self-taught investor of reasonable intelligence, with an internet connection can manage their own informed decisions.
I think the biggest miscommunication is simply projecting future corpus say after 30 years with x investment and y returns but not telling what will be the actual value of that corpus after 30 years.
You forgot one thing. Company stocks inflate by changing their own prices to consumers.
I saw a professor talking about Bitcoin and explaining the Fed Govt increases the money supply by 10% while the S&P500 returns around 10% a year. So basically, you're just breaking even in terms of dollar value. Scary stuff.
Dow topped against gold about 25 years ago -- they are playing games with the currency is much of what is going on here
Even is better than losing !
@@preeyakumari-i2q Bitcoin is up 110% this year. You can stop trying to keep your head above water and actually win. That's the game.
@@bigredtlc1828 What can you buy with Bitcoin ?
Useful ❤
Sir, thanks for the video. Just want to include that wouldn't using a 7% already account for inflation? The S&P 500 has return an average of 10.39% over the last 60 years.
What you're saying is, it's a crap shoot! Like I always thought it was. There are no real answers when it comes to retirement counting on the stock market. It's a scary way to retire, that's why so many people keep working into elderly age and beyond because it is so scary. Fear of running out of money.
When they say 7% is because the inflation is discounted. If you want to consider the inflation, the compound is calculated with 10% (average s&p 500 growth). I am not defending if it true or not. Just saying the values.
Compounding is a miracle ! I can’t believe this video Azul
I assume a 2-3% annual growth rate after accounting for inflation, and also a 25-35% drop in the market at the time of retirement (sequence of return risk). I also simplify things by assuming social security benefits will be 70% or lower and that all income will be taxed at the regular income level regardless of source. Tax rates may be higher.
This might seem rather pessimistic, but I'll be mentally prepare if we don't have enough to retire, and very excited if we end up having more than expected. Either way, its not like this will all happen overnight. We'll know if things are looking good the closer we get to the time.
If all else fails we relocate to a different country.
What about the bubble we are in? Just ride it out? What about when the macd is rolling over? The rsi says way over brought. Seems obvious. If not, buy a cd and watch oldies
A lot of that depends on where you are in life, and how much income you need from investments. A person in a low cost of living area, that is retired with a part-time job and Social Security, might be fine with CDs. Not everyone needs to be in the market all of the time.
It’s simple mathematics: if you lose 50% you need a 100 % gain to just become even again.
another great video, thank you for your hard work
Even though we don't know each other and probably never will, I wish everyone the best in life and lots of luck on their journey.
The key to investing is starting as early as you can and staying the course correctly right off the bat. I have my teenagers in VTI saving $100/mo each. If you start early enough and you start with the right broad market index fund and you continue to dollar cost average over the years there is no reason in the world that you shouldn't have at least a million dollars by the time you retire. Everything else they throw at you is mumbo jumbo and it doesn't matter.
Would like to see a chart if I had bought £10000 worth of gold a year for 30 years what the real value would be
Compounding is what you do to fight inflation, figure out ways to do it with little to no fees.
But, you also adjust your input every year by the inflation percentage. Atleast, and it should even be more because you climb the career ladder. And really, what is 10 or 15k for someone which is actually making good money. If you make less, your priorities will always be having a house first. Whatever you do, don’t become a rent slave.
I retired 20 years ago. That chart you see where 10k a year makes you a millionaire seems to omit the reality of frequent downturns in the market. One question I’ve never had a potential advisor answer “ If I gave you 500K ten years ago what would the value be today?” Most frequent response “ you have the portfolio my mother has.”
Well the stock market has no guarantee. Most advisors don’t beat the market. Just follow the market. That’s the best way to invest if you don’t have inside information
I'm aiming for self sufficiency get rid of bills not off grid like in the woods. I havr a small solar set up which I can extend on
Not many working people retire with more than a million dollars.
Most people retire with 200k or less and get by from social security. If you dont spend much during working years and have good money habits. You can retire comfortably at 55 with 600k portfolio in my opinion
I'm always thinking of worst case scenario.. Because of those bad years we've had in. When I look at our accounts, I think Twenty percent less... Except for my emergency fund/cash, metals, old cars etc... Which don't change much.
What is Cowpounding.
Boom, I really learned something here - many thanks!
A financial advisor didn’t take into account inflated dollars going into your retirement accounts?
Maybe you should seek a new field.
You always need to look at inflation adjusted “real yields”. (I am a retired institutional fund manager and CFA)
This need to become generational habits. If you suddenly wake up at 50 and think you will retire a billionaire, then it is already too late. Who knows what the future holds, but we need to stop making finance taboo. Drill it into your kids heads to focus on investments and not cars and mansions. Time in the market beats timing the market.
Thanks! Your video calms me down everyday I watch it when the market is pumping! I'm going with your insights. It makes the most sense with where we are at in the cycle. The only thing that would make me think this cycle could be slightly different is the overall increased adoption of crypto since 2019 and all the hype with the BTC/ETH ETF speculation. Could the market stay held up this cycle by the anticipation of ETFs and the overall awareness that a bull run is coming? The surge is speculated to possibly be the beginning of a massive new uptrend, making it a crucial time for investors to pay attention, I've personally benefited from following Harry’s Dent trading tactics, amassing 33 bitcoins in a short four weeks period, which speaks volumes about his expertise...
He mostly interacts on Telegrams, using the user-name,
HarrysDent.
I checked the name online and was able to find him, thanks.
Over the years, I've been a part of numerous trading programs, sifting through a barrage of information. Yet, nothing has come close to the sheer clarity, depth, and precision of Harry’s Dent insights.
Thanks, I just googled him I'm really impressed with his credentials. . I will write him an e-mail shortly.
Before selling new financial products, the financial analyst already calculate long term optimum value or equilibrium value. Therefore, it is made for the seller, not for the buyer.
Okay ... I get the inflation stuff, but the alternative is to do nothing and lose even more purchasing power. It is rare that actively managed stock funds are outperforming the index. So, buy cheap index funds, and add in whatever stocks you believe in yourself.
Taxes, inflation (still a tax), fees, and loss are also compounding. It’s gambling. It’s fiat currency not real money. Scam comes to mind. Honest money would be real investing.
My understanding though is inflation will drive up asset costs wouldn’t buying stocks be a hedge against inflation in a way
Never get greedy. Go for safe returns. They don’t make much but if you are risk averse sometimes peace of mind is the most important.
This totally depends on age. Use the 100- age theory to determine risk. It is silly not to have some money in growth stocks in the computer/AI arena.
Downturns are opportunities to capture loss to wash gains tax free....all depends on how you look at things.
Exactly, this is why in all my projection spreadsheets I can see the effects of fees and inflation. I can see if what is in the account is on track in ‘today’s money’ but I can see what the projected value is in today’s money also. If you don’t do that you can’t make sense of it. Much like a lot of people these days that think if someone has a couple of million they are ‘the rich’ because of all of those ‘be a millionaire’ books written in the 1930s. It’s a trap to be very aware of, particularly, don’t trust pension website calculators, they are vey very misleading. You put in, for example, you would like a starting pension of 25000, that’s enough for your needs. Mistake number one! You then learn you only need to work another 3-4years and you can retire. Fantastic. But that’s not true because to have the equivalent of 25000 in 4 years time your pot is going to need to be larger than that projected. If you run through various scenarios you end up realising you will need a starting pension of 29000 and it will take 7-8 years…
As an investment enthusiast, I often wonder how top level investors are able to become millionaires off investing. I do have a significant amount of capital that is required to start up but I have no idea what strategies and direction I need to approach to help me make over $400k like some people are this season.
I believe the safest approach is to diversify investments especially under professional; guide. You can mitigate the effects of a market meltdown by diversifying their investments across different asset classes such as stocks, etfs etc It is important to seek the advice of an expert.
Review your portfolio with a professional and don't make the same mistakes again. Diversify, as in your stock portfolio, and hopefully consult a professional. The key to building wealth is long term. I learned 30 years ago that you have to keep emotions (rookie) out of your investment decisions at all cost. Now, i've made over 800k in profits from my 350k investment.
That does make a lot of sense, unlike us, you seem to have the Market figured out. Who is this coach?
My CFA Melissa Terri Swayne , a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
Thanks a lot for this suggestion. I needed this myself, I looked her up, and I have sent her an email. I hope she gets back to me soon.
If it drops by 25%, don't panic and pull it out. Leave it and wait for it to bounce back. It will.