Socrates470BC
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A really good Mutual Fund may return an average of 12% p.a. over a period of 20 years.
If you had someone like Peter Lynch who got an annual average return of 29.2% when he managed the magellan fund then your return would resemble the middle
column.
If stocksmonthly continues to get the returns of the last 15 years then you would be one wealthy dude after 20 years.
______APR_12%_ __APR_29.2%_ ___APR_49.0%
Year__Capital_ ____Capital_ _____Capital
0.____$10,000_ ____$10,000_ _____$10,000
1.____$11,200_ ____$12,920_ _____$14,900
2.____$12,544_ ____$16,693_ _____$22,201
3.____$14,049_ ____$21,567_ _____$33,079
4.____$15,735_ ____$27,865_ _____$49,288
5.____$17,623_ ____$36,002_ _____$73,439
6.____$19,738_ ____$46,515_ ____$109,424
7.____$22,107_ ____$60,097_ ____$163,042
8.____$24,760_ ____$77,645_ ____$242,933
9.____$27,731_ ___$100,317_ ____$361,970
10.___$31,058_ ___$129,610_ ____$539,335
11.___$34,786_ ___$167,456_ ____$803,609
12.___$38,960_ ___$216,353_ ___$1,197,377
13.___$43,635_ ___$279,528_ ___$1,784,092
14.___$48,871_ ___$361,150_ ___$2,658,297
15.___$54,736_ ___$466,606_ ___$3,960,863
16.___$61,304_ ___$602,855_ ___$5,901,686
17.___$68,660_ ___$778,889_ ___$8,793,512
18.___$76,900_ __$1,006,325_ __$13,102,333
19.___$86,128_ __$1,300,172_ __$19,522,476
20.___$96,463_ __$1,679,822_ __$29,088,489
Investing tends to only get exciting when you make money quickly or you see the end result of a good investment over a fairly long period of time 15 - 20
years or longer.
The more risk we are prepared to take, the more we can expect to make. That is why the stock market will generally return more than a savings account.
To be successful you will need patience, discipline, and wisdom. But most importantly you need a plan and you need to define your goals.
It may prove expensive to acquire that much needed wisdom on your own. Learn by other peoples mistakes. Learn from other peoples successes. Read some
books. Visit your local book store and find a book that you like and feel comfortable with.
Some of the titles I have on my bookshelf include:
One Up on Wall Street by Peter Lynch
How to make money in Stocks by William J. O’Neil (Founder of Investor’s Business Daily)
The Millionaire Next Door by Thomas J Stanley and William D Danco
Check out web sites like fool.com and yahoo finance.
Investigate trading strategies with a proven track record over 3, 5, 10, and 15 years.
Pick something that you understand, find easy to use and will help you realise your goals. A strategy where you can take responsibility for your investments
and be in full control of your capital.
Systems like the Stocks Monthly system are definitely worth investigating once you are up to speed with the nuts and bolts of investing. |
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skipper
 |
Several things will determine your final savings and none can be predicted accurately.
1. What annual rate of return will the mutual fund earn?
2. How will you treat the dividends and income (reinvest or take in cash)?
3. How will you pay the annual state and federal income taxes that will be due?
If a fund returned a steady 4.5% annually, you would have invested $200,000 and your fund would be worth $327,831. Your gain would be $127,831 before taxes. Some of the tax would be due each year and the balance of the tax would be due when then shares are sold.
If a fund returned a steady 8.5% annually, you would have invested $200,000 and your fund would be worth $524,890. Your gain would be $324,890.
What would your funds be worth in today's dollars? If inflation remained tame at about 2.5% per year, $524,890 in the year 2027 would have the same purchasing power as $320,325 today. |
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Patrick M
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Based on a 10% annual return, you will have $630,000. 10% is a reasonable expected return on stocks after mutual fund expenses.
This assumes you invest in a stock mutual fund, not a bond fund. And you should diversify into different stock categories.
Large Cap - Growth
Large Cap - Value
Small Cap
Mid Cap
International
Etc.
See link below |
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Ninja grape juice
 |
There is no way to know. I had a continual investment plan when i was in my early 20's, i put 200$/month into the plan. The mutual fund i had picked went down by exactly 200$/month. At the end of a year, i had lost my entire investment.
Mutual funds can be like the stock market, going up and down daily, or they can be more like a managed money making machine. You will have to do research to pick the winners from the losers.
There is one rule that you must never forget. It's the most important rule when buying funds, but a lot of people ignore it.
That one rule is "Past returns do not influence future results". The fund i bought had returns of 30% / year before i bought it. there's an AGF fund that had a yearly return of 106% (It's a super risky option fund). |
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runs_with_scissors
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It depends entirely on the performance of the funds, and nobody can predict that accurately. |
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derobake
|
It depends on how well the markets do.
To get an idea of how much money, use a compound interest calculator. Here is a good one:
http://www.moneychimp.com/calculator/compound_interest_calculator.htm
Type in the info, and for interest rate use the average rate of return that you think you might get. Start by putting in more conservative numbers like 6 o r 7%. Then put in more aggressive numbers like 8, 9, or 10%. The more conservative you estimations are, the more likely you are to acheive your goal. In other words, it is a lot more likely that the people's portfolios will produce returns around 6 or 7% than 9 or 10%.
Also keep in mind that the number you get from that calculator does not factor in inflation. The value of that amount will not be worth as much as it's present-day value. For example, if you compound $10,000 per year at 7% over 20 years, you get about $438,000. But in terms of today's dollar, if inflation is 3%, then this is only worth about $240,000 of purchasing power.
In other words, $10,000 per year over 20 years is not enough to retire on comfortably. If you only have 20 years, and you have no savings now, you will probably need to contribute about $25,000 - $30,000 PER YEAR to have a "secure retirement".
Just so you know, economic experts are predicting stock returns to be in the 7 - 8% nominal range over the next 30 years. It's called the "Gordon Equation" which says that market returns over long periods of time are based on The Dividend Yield + Growth in Dividends.
To read more about future predictions, download my free book at http://www.invest-for-retirement.com and go straight to chapter 22 (Whipping out our Crystal Balls). |
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Mista Ricksta
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depends on how you model it. You will have 200,000 in cash, baseline, after those 20 years. How much interest you want to apply? |
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ruca80
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you cannot guarantee a return on a mutual fund, so it's impossible to tell what it will be worth. Each mutual fund has a fund fact sheet and on those sheets, it tells you what the investment would be worth, but it would have used the past performance to calculate that. It's not like a CD that has a fixed rate for a number of years. |
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