If this does not get your attention, then nothing will.
If you happen to say $14K, then I would have to say you have lost your marbles.
But the reality is lazy investing can mean $14K when you could have $775K by just being diligent and being prepared to invest regularly.
Over the last 30 years, the average S&P/ ASX has returned about 9%. Not bad, really.
If an investor had invested $1,000 into the Australian share market in 1993 and then took a flight to sit on Waikiki beach sipping cocktails, that investment would have grown to…… $14K by 2023.
Not exactly exciting. Here’s why:
i) You would have spent more on cocktails over those 30 years and
ii) You would also have to reinvest all dividends you received, which means you would be cashless. And that means no cocktails at all.
But if you think about it in percentage terms it is not a bad return. The problem, as you can see it is that $14K does not get you anywhere today.
But what would be the return if that same investor stuck away a further $100 a month and still reinvested all the dividends?
Well, over 30 years, that would be about $170K. So, you start with $1,000 and, over 30 years, invest a further $36K, and you end up with $170K. I like that.
But what if we get a bit more adventurous? What would happen if you invested a whopping $500 a month over 30 years?
Now I get it. In 1993, $1,000 was a lot of money, and the average gross wage was $27K, so putting away $6,000 a year was not exactly easy. But let’s say they managed it.
You end up with $776K. Now, with $775K, you can do a lot more than $14K.
But it does mean you need to sacrifice money for an investment cause – each and every year. If you are prepared to do that, retirement could be fun. Or you can try to live off $14K in retirement – which is not fun.
If you would like to know more contact Hitesh at hitesh@medisuccess.com.au or call 07 3161 9548.
