Budget Snob

Investing Success and the Luck Factor

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What stock market average do you use to forecast investment returns? 10%? 12%? Maybe something a little higher or maybe a little lower?

Try as we might, chance (or luck or whatever you want to call it) is the biggest predictor of how your investments will fair over a 30 year period. Or so says a current Wall Street Journal article.

The biggest factor in long-term returns is how the financial markets happen to perform during the 30 or so years an investor puts money away for retirement.

As recent history has shown, those hoping to retire in the last few years have seen a stock market drop nearly 40%.… Read the rest

Investment Outliers can Kill You

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My company sets aside a percentage of my salary each year (based on company performance) in what’s called a money purchase investment plan. I can invest that money however I choose, mostly. Stocks, bonds, mutual funds. Maybe gold (I’ll have to ask).

So the other day I’m trying to figure out, based on my current salary, what kind of return I would need in order to amass a million dollars by the time I’m 55. In my analysis I did what all good people do nowadays. I Googled. I was looking for the “average stock market return rate”.

The answer? All over the place.… Read the rest