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kleinbl00  ·  1566 days ago  ·  link  ·    ·  parent  ·  post: Hubski, what is your ideal for personal wealth?

You're going to be taxed on that $56k a year, too - that's capital gains. So you're going to lose 15% of that - you're at $47,6. 8% is also kicking ass in this investment climate. Unless you're throwing it all at an index fund, and never move it, you're averaging 3% over the past 15 years. But let's say instead of 8% a year you have a 7% year. You're at $49k. This year you make $41k. Ohh, shit - we have a down year and we're down 10% (2008 was down 37%). That one...million dollars you've been keeping flat, which is actually 700,000, has just become $630k. Let's presume you're going to live lean that year - you can get buy on $20k (which sucks for a "millionaire" but there it is). You used to have a million dollars; now you've got $610k. And suppose it goes up 20% next year - you're back up to $732k. But you only get to pull $32k of that because you're trying to rebuild your nugget.

This is the life of a pension fund. Of an endowment. Of every municipal worker's retirement, of every teacher's retirement, of every school's operating fund. And remember - they were planning on 8%, too. And they've been running 3.