For sure, it's been a pretty above-average time to be in US market. Very much feels like a bubble ready to burst at any moment. But 40% of my investments are in non-US funds, which have gone sideways for the entire time I've invested. All the modest gains are just dividends there.
This strategy doesn't depend on amazing returns. If you save 65% of your income, and you currently have $0, you can retire in about 10.5 years (assuming fairly modest 5% return on investments). A 50% savings rate puts you at a 17 year career. It's the traditional "save 10%" retirement plan that really relies so heavily on the market going up long-term. The "live cheaply" strategy is infinitely more resilient.
For context, since 1900, the DOW Jones has returned, on average, 7.5% after inflation. And the S&P500 has returned ~6.5% adjusted for inflation. And in Piketty's Capital in the 21st Century, he shows that throughout history, capital has generally returned around 5% (which, itself is kind of a problem).
But yes. The future is unknowable. There are countless things that could dramatically change these types of financial forecasts.
This strategy doesn't depend on amazing returns. If you save 65% of your income, and you currently have $0, you can retire in about 10.5 years (assuming fairly modest 5% return on investments). A 50% savings rate puts you at a 17 year career. It's the traditional "save 10%" retirement plan that really relies so heavily on the market going up long-term. The "live cheaply" strategy is infinitely more resilient.
For context, since 1900, the DOW Jones has returned, on average, 7.5% after inflation. And the S&P500 has returned ~6.5% adjusted for inflation. And in Piketty's Capital in the 21st Century, he shows that throughout history, capital has generally returned around 5% (which, itself is kind of a problem).
But yes. The future is unknowable. There are countless things that could dramatically change these types of financial forecasts.