Quote:
Originally Posted by edeeZee
compound interest = [initial outlay x 1.xx^how ever many years] - initial outlay
CPI=consumer price index; this generically indicates how much stronger or weaker your dollar has become after 1 year
Average inflation for the U.S. is 3%. If it is higher than this one year, and you do not earn more money, then your buying power is weakened.
U.S. large cap stocks historically return 8% per year.
Why are we digressing trying to 1-up each other about who's more money savvy or business-educated? This thread was about some person, who claims to be stock-savvy, but is considering an "investment" that goes backward i.e. a car with modifications that cannot earn you money. Who cares if this guy thinks he's an expert, let him think so.
The TS is laughing at how most of us look like monkeys on a leash. I bet he's like nurburing, that guy who supposedly smashed a Z on a test drive. You're playing his game by getting worked up.
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How is this getting "worked up"?
Why do you keep bringing up inflation as if no one knows what it is? What are you trying to say? Are you saying don't bother saving because you can't beat inflation or because you can't beat it by "enough"?
Regardless of the return an investor receives; any $1 saved "now" still puts the person ahead of anyone who doesn't save it no matter what the buying power of that $1 is "then". A person retiring who starts saving at age 18 and retires at age 65 on a "measly" $3M is still probably going to be reasonable comfortable even if that $3M then will only buy half of what it will buy today and he'll certainly be a hell of lot more comfortable than the person who saved nothing
