Warren Buffet said it best when he repeated the saying that "compounding interest is in fact the 8th wonder of the world".
My advice to anyone is to open a Roth IRA Fidelity account and invest in the FID 500.....invest $6000/year and let it ride.
Everyone talks about diversity....diversity, diversity.....makes me chuckle. How much more diversified can you get than investing in the 500 biggest companies in the USA? The 500 index funds are where most filthy rich people have their money tied up in one form or another... Think about it, regardless of party affiliation, people want companies to succeed and if they dont, they get dropped from the fund....its really a bulletproof investment. If the S&P 500 and the index funds that follow it fail, its pretty much a scorched earth situation.....and no stock no matter where you have it is going to be safe from the fallout.
The below are examples of best case scenario's, be it what they may, but it proves the point:
To put it in perspective, if you invest $6000 yearly starting today....You would have ~$725,000 in 20 years at the current return rate.
With an Investment (what you paid in) of $114,000....
1 | $6,000 | $0 | $6,972.00 |
2 | $6,972 | $6,000 | $14,101.46 |
3 | $14,101 | $6,000 | $22,385.90 |
4 | $22,386 | $6,000 | $32,012.42 |
5 | $32,012 | $6,000 | $43,198.43 |
6 | $43,198 | $6,000 | $56,196.57 |
7 | $56,197 | $6,000 | $71,300.42 |
8 | $71,300 | $6,000 | $88,851.09 |
9 | $88,851 | $6,000 | $109,244.96 |
10 | $109,245 | $6,000 | $132,942.65 |
11 | $132,943 | $6,000 | $160,479.36 |
12 | $160,479 | $6,000 | $192,477.01 |
13 | $192,477 | $6,000 | $229,658.29 |
14 | $229,658 | $6,000 | $272,862.93 |
15 | $272,863 | $6,000 | $323,066.73 |
16 | $323,067 | $6,000 | $381,403.53 |
17 | $381,404 | $6,000 | $449,190.91 |
18 | $449,191 | $6,000 | $527,959.83 |
19 | $527,960 | $6,000 | $619,489.33 |
20 | $619,489 | $6,000 | $725,846.60 |
Or to put it into further perspective, if you had invested $15,000 yearly when you were 24 per year into a ROTH 401K and planned to retire at age 59-1/2....You would have ~$20,978,000 in 36 years at the current return rate based on a 10 year average.
With an Investment (what you paid in) of $525,000....
24 | $15,000 | $0 | $17,430.00 |
25 | $17,430 | $15,000 | $35,253.66 |
26 | $35,254 | $15,000 | $55,964.75 |
27 | $55,965 | $15,000 | $80,031.04 |
28 | $80,031 | $15,000 | $107,996.07 |
29 | $107,996 | $15,000 | $140,491.44 |
30 | $140,491 | $15,000 | $178,251.05 |
31 | $178,251 | $15,000 | $222,127.72 |
32 | $222,128 | $15,000 | $273,112.41 |
33 | $273,112 | $15,000 | $332,356.62 |
34 | $332,357 | $15,000 | $401,198.39 |
35 | $401,198 | $15,000 | $481,192.53 |
36 | $481,193 | $15,000 | $574,145.72 |
37 | $574,146 | $15,000 | $682,157.33 |
38 | $682,157 | $15,000 | $807,666.81 |
39 | $807,667 | $15,000 | $953,508.84 |
40 | $953,509 | $15,000 | $1,122,977.27 |
41 | $1,122,977 | $15,000 | $1,319,899.59 |
42 | $1,319,900 | $15,000 | $1,548,723.32 |
43 | $1,548,723 | $15,000 | $1,814,616.50 |
44 | $1,814,616 | $15,000 | $2,123,584.37 |
45 | $2,123,584 | $15,000 | $2,482,605.04 |
46 | $2,482,605 | $15,000 | $2,899,787.05 |
47 | $2,899,787 | $15,000 | $3,384,552.55 |
48 | $3,384,553 | $15,000 | $3,947,850.07 |
49 | $3,947,850 | $15,000 | $4,602,401.78 |
50 | $4,602,402 | $15,000 | $5,362,990.87 |
51 | $5,362,991 | $15,000 | $6,246,795.39 |
52 | $6,246,795 | $15,000 | $7,273,776.24 |
53 | $7,273,776 | $15,000 | $8,467,127.99 |
54 | $8,467,128 | $15,000 | $9,853,802.72 |
55 | $9,853,803 | $15,000 | $11,465,118.77 |
56 | $11,465,119 | $15,000 | $13,337,468.01 |
57 | $13,337,468 | $15,000 | $15,513,137.82 |
58 | $15,513,138 | $15,000 | $18,041,266.15 |
59 | $18,041,266 | $15,000 | $20,978,951.27 |
Thats a lot of elk hunts in your 60's....just saying.