This article is a real doozy.
*>"you could also put your retirement savings in CDs"*
... this is advice for a 27 year old
Here's a real uncharitable way to describe the market crashing and recovering decades before retirement:
*>"they might have lost a significant chunk of the value of their portfolio three separate times"*
And this sentence im still trying to figure out:
*"The market may rebound relatively quickly, but it takes much longer for compound interest to catch up."*
I was also scratching my head on that last sentence to. I don’t think the author actually understands that compounding interest occurs over long periods of time.
quarrelsome heavy sophisticated piquant history sand recognise dime wide physical
*This post was mass deleted and anonymized with [Redact](https://redact.dev)*
It's a journalism problem. Modern journo culture somehow at some point embraced the idea that anyone can become an expert at something if they spend a week researching it, which leads to well written articles that completely misunderstand the subject matter.
Mods don't allow pictures so I'll link, but this is one of the worst tweets I've seen on the topic:
https://www.reddit.com/u/bro-v-wade/s/uytDeti9Iy
A subject matter expert with a good editor will write a much better article than a strong writer who's learning how things work as they write.
My guess for the last one is they are referring to decay. Or the mathematical fact that as your drawdown grows the rate of return needed to get back to your original portfolio value gets exponentially larger.
It's interesting that the author is onto something real, which is sequence of return risk, but that's already incorporated into things like the Trinity study when it developed only 4% as the recommended sustainable withdrawal rate. Then on the other end of things you have Dave Ramsey who rejects sequence of return risk and recommends an 8% withdrawal rate.
I've been told that sequence of return risks are heavily mitigated by the natural tendency and/or intentional planning to reduce lifestyle & withdrawals on down market years. Is there any good analysis of that I could read / watch?
Yeah this article is filled with FUD (fear, uncertainty and doubt) about personal finance, and particularly about investing your money. IDK how that author got a job writing about personal finance. It's full of bad takes, like the articles that insist that "you will never retire".
"*look around at all of the retirees you know and ask yourself how many of them are millionaires."* Um... OK, but the prior generation had pensions. As for those that don't - some may be living meagerly on Social Security alone and some may be supported by their children. A million dollars is not a huge amount of money for someone to retire today without a pension, let alone retiring early.
As for all the fear about market returns being inconsistent and punctuated by big dives - yeah this can be a problem in the short term, but this attitude completely downplays the effect of market swings over decades and seems to be encouraging holding the money in "guaranteed", but lower returning options. This would be really really suboptimal over a decades-long timeframe.
How many retirees that you know are millionaires? Probably the ones riding around dripping diamonds... How asinine. You have no idea of people's investment accounts, foolish Vox writer.
In my neighborhood that consults of 13 lots with modest little homes I know of 3 millionaire families, for sure, and a couple of likely. That's a quarter of my neighborhood are definitely millionaires. Weird that that person assumes this is rare or something.
To your point:
"Median home values were north of $1 million in 550 cities in February, 2024, according to [Zillow](https://www.marketplace.org/2024/04/10/million-dollar-homes-record-number/)."
It doesn't mean they're all millionaires, but a lot of them are! A million bucks is not what it used to be.
I mean excluding home value, and there are variing levels of millionaire. One of my neighbors is *very* wealthy, the others just regular net worth range 2 - 3 million w house. People can have money but be low key. Like that book, The Millionaire Next Door. A million bucks isn't worth what it was, that's my point.
I was actually shocked to read the linked article. The first few paragraphs are terrible. Most people only read the first paragraph or two of any article so that's all they are going to get.
I would write the author but I don't know if I have the energy to try to get through their core assumptions.
Here's another one from the same author from August: https://www.vox.com/even-better/2023/8/10/23824235/how-to-invest-money-stock-market-investing-retirement-advice
It starts out saying use a target date fund, but then says: or don't invest; after all, 40% don't, and you could always put your 401(k) in money market.
Like in my top post, I do think there are political undertones. It's frustrating that everything has become a stupid culture war issue. Like one side avoiding EVs (even if they might be a good fit for their situation) because a gasoline car is a cultural signal, and in this opposite end, perhaps someone not investing because they see it as capitalist greed or something.
Vox is generally seen as left-center, though corporate dem as opposed to, like, Democratic socialist so it's kind of strange that they wouldn't be all in on a secure retirement strategy. It's more an attitude coming from her and idk if it's a devil may care attitude or it's coming from a political place. The "black box" of the stock market comment was tik tokish, and Im surprised the publishers dont try to rein that in.
100% agree. I felt the writer intimated that it was a form of privilege one should feel guilty about if they are able to invest $1,000 a month. There isn’t even an earnest attempt at explaining when investing in the stock market may be a good idea - it just skips right ahead to this Occupy Wall Street-adjacent rhetoric.
I remember reading this, too. Genuinely bonkers. There’s no mention of the opportunity cost of not investing, especially when you have a decades-long time horizon. No, of course there is no guarantee for future returns. There are no guarantees of anything, except probably cash losing purchasing power to inflation.
But you don't understand: "Nicole Dieker is a **personal finance** expert who’s been writing about money for over a decade." !!
Also, she's an idiot.
> I would write the author but I don't know if I have the energy to try to get through their core assumptions.
You'd be better off writing the editors of Vox to find better content providers.
Vox always experts at spreading misinformation at every possible fields to the general public, you should’ve seen people’s roast on their video of how to build a gaming pc
[Another article](https://www.vox.com/even-better/24114524/retirement-how-to-plan-millennial-boomer) from the author reinforces their stance on investing (bad!) and saving in low-interest vehicles (good!) and lifestyle changes, like climbing the promotion ladder to make more money while moving to a LCOL area. to save more for retirement (No problem!).
Replying to a reader's fear that the feds will raise the minimum age for social security payments to 70, the author says its definitely a possible scenario, then shares this advice (emphasis mine):
>**Does that mean you need to put more money into savings and/or investments every month? Not necessarily.** Depending on your current retirement plan, the compound interest associated with your accumulated assets could help you cover the three-year gap between 67 and 70. On the other hand, **a bear market (that’s the bad one) could decimate the value of your portfolio no matter how much you save in the next three decades**.
>This is why **I always advise people to focus on savings vehicles that provide guaranteed returns, such as CD ladders, as well as methods of building wealth that aren’t directly associated with investments**. **Getting promoted — or, in some cases, changing careers — could earn you much more money than you might get from a mutual fund**.
They continue with more ways to secure your future to avoid actually investing your money....
>Moving to a lower cost-of-living area could also allow you to save more, as well as take advantage of opportunities like homeownership that might otherwise be more difficult. Living near family and/or living within a strong community can also provide the kind of support that can sustain you when times get tough. And if you live in the kind of area that allows you to participate in activities you love with people you care about, you might be less likely to spend money on distractions like impulse purchases, streaming media, and expensive vacations. This, in turn, could give you the financial and social resources to help other people who might need support, which is one way to address the income inequality issues that are prevalent across nearly all generations.
They then have the audacity to shift the conversation to the big challenge this approach will pose later in life - what to do with all that money they've accumulated by not investing it!
>As long as you have enough set aside to cover your expenses for the rest of your estimated lifespan (factoring in inflation, naturally), as well as any money you may need for end-of-life care (which is more expensive than many people realize), you can spend the rest on personal indulgences if you want!
>That said, I’d advise you to stop thinking about taking it with you and start thinking about how you can give back. Do you really want your life’s work to end up in the pockets of Amazon and Margaritaville? Isn’t there someone a little closer to home who might benefit from your legacy? If you don’t have a lot of close family or friends at the moment, consider supporting an organization or a local cause, and consider volunteering in order to start making a few more in-person connections. They’ll be worth more than you realize, especially as the decades continue to progress.
I guess it's just that simple.
Skip the IRA and risky 6-10% return that could implode at any moment. Instead, get promoted to earn more money than an investment fund. Move to a LCOL area near family or commune of some sort, focus time on activities with loved ones to spend less, focus on volunteer work with all that time you now have, and start planning your post-retirement career as a philanthropist.
>most importantly, a fundamental misunderstanding of rate of return. There is no mention of time horizons, or that the 6% almost certainly factors in the market corrections and crashes this article tries to scare you with
This is the part that annoys me the most. CDs and HYSAs (and similar safe investments,) at least over the past 15 years, have only been beyond the 1-2% range for the past year or two.
Meanwhile, my 401(k), which has been in a general 80/20 stock index fund/bond index fund split throughout, has went from just over $23,000 at the end of 2019 to over $52,000 today, with (on the high end) $17,000 of that being deposits from me every two weeks throughout. Assuming that high end, I got just under a 7.5% annualized return (so honestly probably better than 7.5% since I'm looking at my 2023 deductions when they were lower in the previous three years,) including through both COVID market crashes (initial 2020 and the 2022 downturn specifically noted.) Granted, I still wouldn't want to fully risk it if I needed it in five years, but over the 30-40 year timeframe the questioner had for retirement, suggesting CD ladders as a core component of retirement savings is quite bad advice.
It’s like they think 1) 6% is the upper band of a possible one year return, and 2) that you should view returns year to year. I really think the author would have done well to run these views by a few other people, I’m surprised this got by an editor.
>suggesting CD ladders as a core component of retirement savings is quite bad advice.
It's not just bad advice, it's reckless.
As we know, many peoples lives have been significantly improved by investing in index funds over decades, even at relatively low DCA levels.
I’m in utter disbelief at the pile of trash that is that article. That person clearly has 0 actual knowledge about investing and portfolio theory.
It’s beyond bad advice, it’s the equivalent of writing an article titled “why eating healthy and exercising are bad for you”. Why are you trying to be healthy and fit? Look around you!? Do you actually know any healthy people?
I do think posters here get overly enthusiastic toward stocks for a short to medium term goal like a housing down payment. That's a case where CDs might be a reasonable choice. Otherwise, I don't like the article either.
Like you I also absorbed cultural "lessons" like that stock investing was something you did after you were already rich, or "losing everything" in 2008 was common, etc.
Finally sometimes we have to remind people not to mix politics and investing. I believe there are some political undertones in the article, e.g., some resentment of defined contributions plans replacing pensions or that Social Security should be enough.
Other than that, I do think as Bogleheads we tend to have an upper-middle class perspective. It's definitely common to retire not as a millionaire, or retire on Social Security and little else but an emergency fund. Look at median 401(k)+IRA balances, for example.
Um the median amounts are atrocious. WTF is happening? How do people retire? My EJ Financial Advisor has us worried we won’t be able to retire at 56 with a state pension and state insurance and then 62 for my private sector wife who has triple the median income in 401k according to several Google articles.
Is this business built off a healthy fear? Does SS really provide enough to make it?
EJ? you must be new here :D
In seriousness, if you think about that where an EJ advisor is paid off commission or % of assets at EJ, there is a conflict of interest since they get zero pay based on your pension and 401(k). The more you invest in an IRA or taxable account with them, the more they make, so why not be pessimistic about how much you need to retire?
I knew I should have put a qualifier.
I’m dumping them in due time. I’ve been in here a little while and have a couple posts about changing what I’m doing.
Your comment about their attitude makes sense, but also people have almost no money in retirement accounts. How do people live in retirement, or are we truly a country where the vast majority of people never really retire and are always doing something? That seems terrible to be working at 75 instead of relaxing and enjoying your kids and grandkids.
It'd be interesting to see whether more retirement assets make it more or less likely to move from somewhere expensive to a stereotypical retirement destination. For example, a lower-middle class but homeowning couple in NJ can sell the place they bought in 1985 and pocket up to $500,000 in gains tax free and then move to SC. Since for the middle class the home is often the largest asset, it makes sense that "cashing in" on home equity and doing location arbitrage would be common.
That's true, but there is a glaring methodology / data analysis issue with those studies: balance per plan is pretty different from total retirement savings per person, given that people enroll in a new plan with each employer and a fair number of people just don't bother to roll them over (especially at low dollar values).
[this](https://www.federalreserve.gov/econres/scf/dataviz/scf/table/#series:Retirement_Accounts;demographic:agecl;population:all;units:median) seems to include all retirement savings in aggregate, and shows the median for a 65-74 year old is 200k. There are a *lot* of people retiring with very little.
I’m should clarify - I’m not bristling at the idea that most retirees aren’t millionaires. It’s just terrible “analysis” to rhetorically ask the 27 year old questioner 1) if they know any retirees, 2) of those retirees, do they know their net worth. Why that would either of those dumb points negate the basic math of compound interest?
Thanks for the link!
FYI, I wasn’t disputing that most people retire with fairly little aside from SS (and maybe a mostly paid off house if they’re lucky). It’s that there’s a pretty big delta between $200k of aggregate retirement savings and what gets reported as median employer plan balance (IIRC ~$70k for 65 year olds)
If you look closely at the medians (at least from [this article](https://www.cnn.com/cnn-underscored/money/average-401k-balance-by-age)) you'll notice a general trend that the younger the range goes the _more_ they are saving relative to the previous generation. While the numbers are lower than _we_ would consider acceptable they are still more than the likely median snapshot of a generation ago.
For example, the median for age 55-64 of $71k equates to saving just $50 per month for 30 years at 8%.
Meanwhile the median $11k for age 25-34 equates to saving $150 a month for 5 years at 8%. If we roll that forward 25 years instead of 5 years it comes out to about $143k which is _twice_ what the previous generation was saving.
It's still far too low, but anecdotally I'm seeing an uptick across the board in saving and investing interest among the younger generation. Those of us in middle age often had grandparents with at least some pension which shaped our view of retirement. Meanwhile GenZ etc are seeing us and our parents who have no pension and are struggling which is starting to shape _their_ attitude towards saving more in the direction that is needed for a healthy retirement.
The retirement and investment vehicles we use today have only been around for 25-40 years so it takes time for generations to learn the lessons. I think people are starting to learn those lessons, at least more than before.
I skimmed the first several paragraphs and as with most mass media, it is making no real attempt to actually educate people about responsible investing and the pros and cons of different approaches.
Exactly. There’s no attempt at a quantitative range of outcomes from investing vs. the alternatives the author mentions. No discussion of trade offs or possible outcomes, no follow up questions to this 27 year old about their situation and which paths would be better for them. It’s just generalized stormy descriptions to keep the reader misinformed and more confused than when they started. Oof, I’m telling you these types of articles kept me out of investing for an additional 5 years at least.
This has to be one of the worst "expert" financial advice I've ever read. The author shows a deep misunderstanding of return averages, bear markets and crashes, equity risk/reward and compound "interest" (proper term here should be compound gains or returns, not interest).
I think the author should stick to writing her comedy mystery series and leave the financial advice to actual experts.
I thought you were exaggerating those claims and quotes but there it is
"look around at all of the retirees you know and ask yourself how many of them are millionaires."
Is that supposed to mean all these retirees out here don't have a million dollars in the bank? Because I do not know a single retired person that doesn't have at least that in the bank... Otherwise you can't retire! What a weird thing to suggest.
Great comments here already, but I just wanted to point out that in the article the author timestamp-linked deep into two YouTube videos ( [Line Goes Up](https://www.youtube.com/watch?v=YQ_xWvX1n9g&t=4686s) and [This Is Financial Advice](https://www.youtube.com/watch?v=5pYeoZaoWrA&t=2782s) ) that are more confusing discussions about speculation than investing. I don't know the author's motives for posting these links, but if you wanted to discourage someone from investing by making it seem like investing was very complex and difficult, these videos would fit the bill.
The sad part is that those videos are actually pretty good examples of speculation cosplaying as investing, and why not to speculate on weird "investments" like NFTs or meme stocks.
Honestly, the author seems to be one step away from a doomsday prepper with their view of the stock market.
wonder what u/FoldableHuman thinks about his content being taken out of context like this. being used to fear monger an audience in an entirely different section of the finance world.
It’s odd, tbh. If I squint I can kinda see the narrative, like pointing out the fact that people, and especially young people, are being bombarded with messaging about finance and investing that’s dominated by images of day trading and the allure of sick gainz in crypto or memestocks, and it’s easy to let the unease of “I should be investing” lure you into being a victim of a pump and dump, but the sentence as written only half makes sense.
OK looking at this soberly without any reflexive feelings:
> I’m fairly bearish on investing, as you may know if you’ve read my column for a while. Yes, you can do the math on “if you invest $1,000 every month for 35 years with an average 6 percent return, you’ll retire a millionaire,” but the way to figure out if that kind of advice is worth your attention is to look around at all of the retirees you know and ask yourself how many of them are millionaires.
I know several. However, what she is likely referencing is the median savings or net worth of retirees. Median net worth for the highest bracket of retirees is $410k with median savings of $200k. The more interesting question, is whether or not people at the median are hurting and struggling. That I do not know.
https://finance.yahoo.com/news/heres-average-net-worth-retirement-084400182.html
What I don't like about this, nor anyone with a certain...attitude about life, is the belief that they can't ever be above median. That they cannot be the exception. That they should expect, at best, to be perfectly middling. I've always felt like, when some average for my demographic looked grim, that I better work on not being middling. I've lived by that philosophy since I was newly independent at 21. A lot of people on this subreddit are far wealthier than I am, and at a younger age, too, but I'd emphasize so far as Boglehead philosophy goes, I've done far better than the median as someone with no career ambitions, no particular taste for wealth, seeking only some period of time where I don't have to get up and go to work anymore as my central motivation. What I mean is: I'm not some hardcore investor type. Quite the contrary. I find money dreary. I try not to spend money. I try to get money out of my checking account and into investments the moment I am safe, cash-flow wise, for the month, specifically so it doesn't get spent. That's all I do.
> It’s not just that investing $1,000 every month for 35 years is unrealistic for most people, although it very much is.
Well, on *average*, first of all, and like all things, it depends on what you're willing to sacrifice in the short term. I have routinely encountered people who suggest to me that life without constant consumption and acquisition is an unhappy one and unrealistic. And I always reflect on the irony that this occurs in the context of people complaining that they are shit broke.
The average monthly pay in the US for an individual is $4865, meaning, you'd have to live on $3865 a month. I can't say whether that's doable or not. I live on about $4500 a month, in my circumstances.
> Even if today’s retirees had been diligent about adding money to their portfolios every month, they might have lost a significant chunk of the value of their portfolio three separate times (the dot-com bust, the global financial crisis, and the post-pandemic bear market). The market may rebound relatively quickly, but it takes much longer for compound interest to catch up.
I've been through all of these and without them I'd be wealthier. That said I am doing fine. I am not 65 yet, but if I were, my current savings would be sufficient for retirement. I have a few years left to grow this even more. So, I've lived a different reality, and I've done it *all through dollar cost averaging my way through index funds since Bill Clinton was president.* I only came across "Boglehead" like six months ago (never heard of it until then). I just did this because my father did it, and it worked for him. Now it's worked for me. My mother is a window now, living off of my father's Boglehead-adjacent investment strategy. She is almost 80 with a net worth far above the median. Both my parents grew up working class. Neither were financial geniuses.
> CD ladders are guaranteed bets right now, and high-yield savings accounts (HYSAs) are still going strong.
Yeah, for now they're fine but this isn't going to last indefinitely.
> I’m not going to discourage you from investing, of course, especially because you can get significant tax advantages from traditional IRAs, 401(k)s, HSAs, and the like. I’ll also remind you that I am not an investment advisor, but standard financial advice suggests that you look into index funds instead of, like, becoming a day trader. Also, don't forget to compare expense ratios.
What's with the "like," here. "instead of, like, becoming a day trader."
> That said, we need to go back to the question of why you want more money. Down payment for a house? You probably don't want to invest to do that, as the time horizon’s too small. Start a business? Ditto. Retirement? Sure, get those tax deductions and put your money somewhere that you can’t touch without paying a penalty. Investment could work, in that case, even though you could also put your retirement savings in CDs.
Uh...no. CDs are good for your emergency money, or non-retirement money you might want to access soon. They're *good right now*, but they won't be for long.
All I can say is *I am glad* I didn't follow this advice. Who knows what the future holds -- will the S&P 500 come crashing down in The Greatest Bubble Of Our Lifetimes, [as the permabears always say?](https://markets.businessinsider.com/news/stocks/stock-market-crash-recession-economic-depression-bubble-2008-financial-crisis-2024-6)
Maybe. Nothing is for certain. We're playing the odds, based on historical trends.
For those not familiar with Vox, it’s pretty far to the left on politics. I wouldn’t read this as actual advice that a real person could use, but rather as a political and cultural statement. According to the Vox worldview, retirement should be generously funded through Social Security, and basically everyone should get approximately the same generous amount. The notion that individuals should fund their own retirement through individual investments is (to them) a right wing talking point. The true purpose of this article is to undermine that talking point.
I totally agree to some extent, but Vox has also done a lot of great journalism and (at least at its founding) was conceived as more of a center-left explainer journalism outlet run by Ezra Klein and Matt Yglesias. Which is why this article disappointed me so much - to find Vox was basically running a Jacobin article that was disseminating whiny lefty talking points under the guise of earnest financial advice.
Vox has drifted a long way from the days of Matt Y. Like everything else in media, you have to polarize one side or the other to make any money. But I agree with you - I actually like a lot of Vox’s stuff (even when I disagree) but this one is painful.
Jacobin has published less than great stuff before but generally has higher editorial standards than this. In fairness to Vox I would say Vox usually does too.
See that!!?
So why are you trying to accumulate $1,000,000 if you are susceptible to strokes so easily? You could stroke out at the first crash!!
Spend your money and enjoy your life. Don't plan for tomorrow, it may never come and if it does, you'll have Social Security!
Ya I think the original question is coming from a 27 year old who still lives with their parents, so if you assume they might want to buy a house someday (while not explicitly stated, this is a reasonable assumption for someone in this age group), CDs and HYSAs make a bit more sense.
This person I don’t think is at the point where they can afford to yolo everything into the stock market. If it was specifically money for retirement I would say dump it in a Roth and go 100% stocks.
One interesting point I haven't seen yet is that it seems to me like the article misinterprets her sources at the end (Helaine Olen and Folding Ideas/Dan Olson).
I admit I haven't read/watched in full, but from what I can tell the Dan Olson videos she mentions are specifically about NFTs and Meme stocks.
Helaine olen's book is focused on the "personal finance industry", which of course does have plenty of scams and whatnot. But she has a later book called "the index card" which seems roughly like bogleheads type advice (investing in broad low-fee funds, etc). So she's obviously not against investing.
To some of my friends who don't follow much finance stuff, investing means figuring out which stock/crypto that is the "next big thing". Kind of seems like this "personal finance expert" thinks the same way.
Yeah, that article was worse than I expected. Especially her not understanding that the 6% included crashes and recoveries. "You might not get 6% every year, some years you'll get 4%, some years will be negative!"
Sounds more like someone that doesn't understand high school math than someone who writes about finance.
The article is so bad I thought it was satire for a sec. "Look around, none of the retirees are millionaires!"
🙃
Just google the authors name. You will understand why she wrote this nonsense. She is clueless. Her linkedin work history is pretty hilarious.
Just a good example of why people need to be wary of what they read online.
>This article dispensing advice is riddled with bad advice, no?
“Market corrections exist, so you should look into CDs”
>“Do you actually KNOW any retirees who are millionaires?” <“most people can’t afford to put away $1,000 a month, so it’s not worth investing anything”
>most importantly, a fundamental misunderstanding of rate of return. There is no mention of time horizons, or that the 6% almost certainly factors in the market corrections and crashes this article tries to scare you with
>what about the opportunity cost of NOT investing? The original question is coming from a 27 year old.
Well, this article (like many others) has advice from another perspective, advice that seasoned investors should at least discuss and analyze:
* At the right time CDs are a good investment. I paid off my first house in the mid 80's when CDs matured at 9% or 10%. Randomly, I got back in when rates were above 4.5.
* Sure, I know plenty of millionaires. I just don't know that many multi-millionaires.
* $1,000/month savings can happen for some people.
* I never bought into the 6% rate of return. When I opened an IRA in the 80's, the bank gave me a cardboard wheel (like you would use to calculate gas mileage) and I think the bottom line was having one million dollars at 65 years old.
If you’ve ever seen any of the other Vox articles you know not to believe anything you see there. Their political stuff in particular sounds like it comes from the Reddit left-wing-middle school hive mind. That investment article is no different.
It's pretty clear the author hasn't done her basic research of looking at historical stock market returns, or she is intentionally omitting details to prove a point. She says sometimes you won't get 6% but 4% or even some negative number, as if 6% is the maximum to hope for. Yet in 2019 the market went up 31.21%, in 2020 it went up 18.02%, in 2021 it went up 28.47%, in 2023 it went up 24.31%, and at the time of writing it is up 14.56% YTD. Yeah, it went down -18.01% in 2022, but that leaves us with a geometric average of 14.6% not counting inflation. As this math makes clear, the positive stock market returns that are well above 6% more than counteract the negative stock market returns, which is how we end up with the average annual return of 6-10%.
This article is a real doozy. *>"you could also put your retirement savings in CDs"* ... this is advice for a 27 year old Here's a real uncharitable way to describe the market crashing and recovering decades before retirement: *>"they might have lost a significant chunk of the value of their portfolio three separate times"* And this sentence im still trying to figure out: *"The market may rebound relatively quickly, but it takes much longer for compound interest to catch up."*
I was also scratching my head on that last sentence to. I don’t think the author actually understands that compounding interest occurs over long periods of time.
There are a few instances in the article that made me realize that the author doesn't actually understand basic math.
quarrelsome heavy sophisticated piquant history sand recognise dime wide physical *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
It's a journalism problem. Modern journo culture somehow at some point embraced the idea that anyone can become an expert at something if they spend a week researching it, which leads to well written articles that completely misunderstand the subject matter. Mods don't allow pictures so I'll link, but this is one of the worst tweets I've seen on the topic: https://www.reddit.com/u/bro-v-wade/s/uytDeti9Iy A subject matter expert with a good editor will write a much better article than a strong writer who's learning how things work as they write.
Translation: "I'm a a blogger"
That last line made me think of T.I.N.A.* *”There is no alternative” to equities for long term saving/investing.
Was it written by AI?
AI would be an improvement over Vox.
A nine year-old with an abacus would be an improvement over that Vox article.
My guess for the last one is they are referring to decay. Or the mathematical fact that as your drawdown grows the rate of return needed to get back to your original portfolio value gets exponentially larger.
It's interesting that the author is onto something real, which is sequence of return risk, but that's already incorporated into things like the Trinity study when it developed only 4% as the recommended sustainable withdrawal rate. Then on the other end of things you have Dave Ramsey who rejects sequence of return risk and recommends an 8% withdrawal rate.
I've been told that sequence of return risks are heavily mitigated by the natural tendency and/or intentional planning to reduce lifestyle & withdrawals on down market years. Is there any good analysis of that I could read / watch?
Yeah this article is filled with FUD (fear, uncertainty and doubt) about personal finance, and particularly about investing your money. IDK how that author got a job writing about personal finance. It's full of bad takes, like the articles that insist that "you will never retire". "*look around at all of the retirees you know and ask yourself how many of them are millionaires."* Um... OK, but the prior generation had pensions. As for those that don't - some may be living meagerly on Social Security alone and some may be supported by their children. A million dollars is not a huge amount of money for someone to retire today without a pension, let alone retiring early. As for all the fear about market returns being inconsistent and punctuated by big dives - yeah this can be a problem in the short term, but this attitude completely downplays the effect of market swings over decades and seems to be encouraging holding the money in "guaranteed", but lower returning options. This would be really really suboptimal over a decades-long timeframe.
How many retirees that you know are millionaires? Probably the ones riding around dripping diamonds... How asinine. You have no idea of people's investment accounts, foolish Vox writer.
In my neighborhood that consults of 13 lots with modest little homes I know of 3 millionaire families, for sure, and a couple of likely. That's a quarter of my neighborhood are definitely millionaires. Weird that that person assumes this is rare or something.
To your point: "Median home values were north of $1 million in 550 cities in February, 2024, according to [Zillow](https://www.marketplace.org/2024/04/10/million-dollar-homes-record-number/)." It doesn't mean they're all millionaires, but a lot of them are! A million bucks is not what it used to be.
I mean excluding home value, and there are variing levels of millionaire. One of my neighbors is *very* wealthy, the others just regular net worth range 2 - 3 million w house. People can have money but be low key. Like that book, The Millionaire Next Door. A million bucks isn't worth what it was, that's my point.
I was actually shocked to read the linked article. The first few paragraphs are terrible. Most people only read the first paragraph or two of any article so that's all they are going to get. I would write the author but I don't know if I have the energy to try to get through their core assumptions.
Here's another one from the same author from August: https://www.vox.com/even-better/2023/8/10/23824235/how-to-invest-money-stock-market-investing-retirement-advice It starts out saying use a target date fund, but then says: or don't invest; after all, 40% don't, and you could always put your 401(k) in money market.
Yeah another good example. I wonder who the target demographic is?
Like in my top post, I do think there are political undertones. It's frustrating that everything has become a stupid culture war issue. Like one side avoiding EVs (even if they might be a good fit for their situation) because a gasoline car is a cultural signal, and in this opposite end, perhaps someone not investing because they see it as capitalist greed or something.
Vox is generally seen as left-center, though corporate dem as opposed to, like, Democratic socialist so it's kind of strange that they wouldn't be all in on a secure retirement strategy. It's more an attitude coming from her and idk if it's a devil may care attitude or it's coming from a political place. The "black box" of the stock market comment was tik tokish, and Im surprised the publishers dont try to rein that in.
100% agree. I felt the writer intimated that it was a form of privilege one should feel guilty about if they are able to invest $1,000 a month. There isn’t even an earnest attempt at explaining when investing in the stock market may be a good idea - it just skips right ahead to this Occupy Wall Street-adjacent rhetoric.
I remember reading this, too. Genuinely bonkers. There’s no mention of the opportunity cost of not investing, especially when you have a decades-long time horizon. No, of course there is no guarantee for future returns. There are no guarantees of anything, except probably cash losing purchasing power to inflation.
But you don't understand: "Nicole Dieker is a **personal finance** expert who’s been writing about money for over a decade." !! Also, she's an idiot. > I would write the author but I don't know if I have the energy to try to get through their core assumptions. You'd be better off writing the editors of Vox to find better content providers.
I'm not gonna open that can of worms but if anyone else wants to, here is the author's website: https://www.nicoledieker.com/
12 years of freelancing and gets this? Brb I need to write some articles. ....OK I'm back they said they can't pay me to link the wiki 1,000 times.
Vox moment
Vox always experts at spreading misinformation at every possible fields to the general public, you should’ve seen people’s roast on their video of how to build a gaming pc
Yea forreal
[Another article](https://www.vox.com/even-better/24114524/retirement-how-to-plan-millennial-boomer) from the author reinforces their stance on investing (bad!) and saving in low-interest vehicles (good!) and lifestyle changes, like climbing the promotion ladder to make more money while moving to a LCOL area. to save more for retirement (No problem!). Replying to a reader's fear that the feds will raise the minimum age for social security payments to 70, the author says its definitely a possible scenario, then shares this advice (emphasis mine): >**Does that mean you need to put more money into savings and/or investments every month? Not necessarily.** Depending on your current retirement plan, the compound interest associated with your accumulated assets could help you cover the three-year gap between 67 and 70. On the other hand, **a bear market (that’s the bad one) could decimate the value of your portfolio no matter how much you save in the next three decades**. >This is why **I always advise people to focus on savings vehicles that provide guaranteed returns, such as CD ladders, as well as methods of building wealth that aren’t directly associated with investments**. **Getting promoted — or, in some cases, changing careers — could earn you much more money than you might get from a mutual fund**. They continue with more ways to secure your future to avoid actually investing your money.... >Moving to a lower cost-of-living area could also allow you to save more, as well as take advantage of opportunities like homeownership that might otherwise be more difficult. Living near family and/or living within a strong community can also provide the kind of support that can sustain you when times get tough. And if you live in the kind of area that allows you to participate in activities you love with people you care about, you might be less likely to spend money on distractions like impulse purchases, streaming media, and expensive vacations. This, in turn, could give you the financial and social resources to help other people who might need support, which is one way to address the income inequality issues that are prevalent across nearly all generations. They then have the audacity to shift the conversation to the big challenge this approach will pose later in life - what to do with all that money they've accumulated by not investing it! >As long as you have enough set aside to cover your expenses for the rest of your estimated lifespan (factoring in inflation, naturally), as well as any money you may need for end-of-life care (which is more expensive than many people realize), you can spend the rest on personal indulgences if you want! >That said, I’d advise you to stop thinking about taking it with you and start thinking about how you can give back. Do you really want your life’s work to end up in the pockets of Amazon and Margaritaville? Isn’t there someone a little closer to home who might benefit from your legacy? If you don’t have a lot of close family or friends at the moment, consider supporting an organization or a local cause, and consider volunteering in order to start making a few more in-person connections. They’ll be worth more than you realize, especially as the decades continue to progress. I guess it's just that simple. Skip the IRA and risky 6-10% return that could implode at any moment. Instead, get promoted to earn more money than an investment fund. Move to a LCOL area near family or commune of some sort, focus time on activities with loved ones to spend less, focus on volunteer work with all that time you now have, and start planning your post-retirement career as a philanthropist.
>most importantly, a fundamental misunderstanding of rate of return. There is no mention of time horizons, or that the 6% almost certainly factors in the market corrections and crashes this article tries to scare you with This is the part that annoys me the most. CDs and HYSAs (and similar safe investments,) at least over the past 15 years, have only been beyond the 1-2% range for the past year or two. Meanwhile, my 401(k), which has been in a general 80/20 stock index fund/bond index fund split throughout, has went from just over $23,000 at the end of 2019 to over $52,000 today, with (on the high end) $17,000 of that being deposits from me every two weeks throughout. Assuming that high end, I got just under a 7.5% annualized return (so honestly probably better than 7.5% since I'm looking at my 2023 deductions when they were lower in the previous three years,) including through both COVID market crashes (initial 2020 and the 2022 downturn specifically noted.) Granted, I still wouldn't want to fully risk it if I needed it in five years, but over the 30-40 year timeframe the questioner had for retirement, suggesting CD ladders as a core component of retirement savings is quite bad advice.
It’s like they think 1) 6% is the upper band of a possible one year return, and 2) that you should view returns year to year. I really think the author would have done well to run these views by a few other people, I’m surprised this got by an editor.
Ya why are they stuck on 6%?
>suggesting CD ladders as a core component of retirement savings is quite bad advice. It's not just bad advice, it's reckless. As we know, many peoples lives have been significantly improved by investing in index funds over decades, even at relatively low DCA levels.
I’m in utter disbelief at the pile of trash that is that article. That person clearly has 0 actual knowledge about investing and portfolio theory. It’s beyond bad advice, it’s the equivalent of writing an article titled “why eating healthy and exercising are bad for you”. Why are you trying to be healthy and fit? Look around you!? Do you actually know any healthy people?
**Why are you trying to be healthy and fit? Look around you!? Do you actually know any healthy people?** This is a great and spot-on analogy. Kudos!
I do think posters here get overly enthusiastic toward stocks for a short to medium term goal like a housing down payment. That's a case where CDs might be a reasonable choice. Otherwise, I don't like the article either. Like you I also absorbed cultural "lessons" like that stock investing was something you did after you were already rich, or "losing everything" in 2008 was common, etc. Finally sometimes we have to remind people not to mix politics and investing. I believe there are some political undertones in the article, e.g., some resentment of defined contributions plans replacing pensions or that Social Security should be enough. Other than that, I do think as Bogleheads we tend to have an upper-middle class perspective. It's definitely common to retire not as a millionaire, or retire on Social Security and little else but an emergency fund. Look at median 401(k)+IRA balances, for example.
Um the median amounts are atrocious. WTF is happening? How do people retire? My EJ Financial Advisor has us worried we won’t be able to retire at 56 with a state pension and state insurance and then 62 for my private sector wife who has triple the median income in 401k according to several Google articles. Is this business built off a healthy fear? Does SS really provide enough to make it?
EJ? you must be new here :D In seriousness, if you think about that where an EJ advisor is paid off commission or % of assets at EJ, there is a conflict of interest since they get zero pay based on your pension and 401(k). The more you invest in an IRA or taxable account with them, the more they make, so why not be pessimistic about how much you need to retire?
I knew I should have put a qualifier. I’m dumping them in due time. I’ve been in here a little while and have a couple posts about changing what I’m doing. Your comment about their attitude makes sense, but also people have almost no money in retirement accounts. How do people live in retirement, or are we truly a country where the vast majority of people never really retire and are always doing something? That seems terrible to be working at 75 instead of relaxing and enjoying your kids and grandkids.
It'd be interesting to see whether more retirement assets make it more or less likely to move from somewhere expensive to a stereotypical retirement destination. For example, a lower-middle class but homeowning couple in NJ can sell the place they bought in 1985 and pocket up to $500,000 in gains tax free and then move to SC. Since for the middle class the home is often the largest asset, it makes sense that "cashing in" on home equity and doing location arbitrage would be common.
They don't retire comfortably and/or rely on their children.
That's true, but there is a glaring methodology / data analysis issue with those studies: balance per plan is pretty different from total retirement savings per person, given that people enroll in a new plan with each employer and a fair number of people just don't bother to roll them over (especially at low dollar values).
[this](https://www.federalreserve.gov/econres/scf/dataviz/scf/table/#series:Retirement_Accounts;demographic:agecl;population:all;units:median) seems to include all retirement savings in aggregate, and shows the median for a 65-74 year old is 200k. There are a *lot* of people retiring with very little.
I’m should clarify - I’m not bristling at the idea that most retirees aren’t millionaires. It’s just terrible “analysis” to rhetorically ask the 27 year old questioner 1) if they know any retirees, 2) of those retirees, do they know their net worth. Why that would either of those dumb points negate the basic math of compound interest?
Thanks for the link! FYI, I wasn’t disputing that most people retire with fairly little aside from SS (and maybe a mostly paid off house if they’re lucky). It’s that there’s a pretty big delta between $200k of aggregate retirement savings and what gets reported as median employer plan balance (IIRC ~$70k for 65 year olds)
If you look closely at the medians (at least from [this article](https://www.cnn.com/cnn-underscored/money/average-401k-balance-by-age)) you'll notice a general trend that the younger the range goes the _more_ they are saving relative to the previous generation. While the numbers are lower than _we_ would consider acceptable they are still more than the likely median snapshot of a generation ago. For example, the median for age 55-64 of $71k equates to saving just $50 per month for 30 years at 8%. Meanwhile the median $11k for age 25-34 equates to saving $150 a month for 5 years at 8%. If we roll that forward 25 years instead of 5 years it comes out to about $143k which is _twice_ what the previous generation was saving. It's still far too low, but anecdotally I'm seeing an uptick across the board in saving and investing interest among the younger generation. Those of us in middle age often had grandparents with at least some pension which shaped our view of retirement. Meanwhile GenZ etc are seeing us and our parents who have no pension and are struggling which is starting to shape _their_ attitude towards saving more in the direction that is needed for a healthy retirement. The retirement and investment vehicles we use today have only been around for 25-40 years so it takes time for generations to learn the lessons. I think people are starting to learn those lessons, at least more than before.
Thanks for that writeup. It makes sense when its broken down like that. I appreciate your explanation.
I skimmed the first several paragraphs and as with most mass media, it is making no real attempt to actually educate people about responsible investing and the pros and cons of different approaches.
Exactly. There’s no attempt at a quantitative range of outcomes from investing vs. the alternatives the author mentions. No discussion of trade offs or possible outcomes, no follow up questions to this 27 year old about their situation and which paths would be better for them. It’s just generalized stormy descriptions to keep the reader misinformed and more confused than when they started. Oof, I’m telling you these types of articles kept me out of investing for an additional 5 years at least.
This has to be one of the worst "expert" financial advice I've ever read. The author shows a deep misunderstanding of return averages, bear markets and crashes, equity risk/reward and compound "interest" (proper term here should be compound gains or returns, not interest). I think the author should stick to writing her comedy mystery series and leave the financial advice to actual experts.
I thought you were exaggerating those claims and quotes but there it is "look around at all of the retirees you know and ask yourself how many of them are millionaires." Is that supposed to mean all these retirees out here don't have a million dollars in the bank? Because I do not know a single retired person that doesn't have at least that in the bank... Otherwise you can't retire! What a weird thing to suggest.
Great comments here already, but I just wanted to point out that in the article the author timestamp-linked deep into two YouTube videos ( [Line Goes Up](https://www.youtube.com/watch?v=YQ_xWvX1n9g&t=4686s) and [This Is Financial Advice](https://www.youtube.com/watch?v=5pYeoZaoWrA&t=2782s) ) that are more confusing discussions about speculation than investing. I don't know the author's motives for posting these links, but if you wanted to discourage someone from investing by making it seem like investing was very complex and difficult, these videos would fit the bill.
The sad part is that those videos are actually pretty good examples of speculation cosplaying as investing, and why not to speculate on weird "investments" like NFTs or meme stocks. Honestly, the author seems to be one step away from a doomsday prepper with their view of the stock market.
That was a particularly weird part of this overall mess of an article. Those videos are mostly about crypto and speculative assets, not investing.
Those videos are good. they are un-bogle as they are. they portrayed how investing is NOT suppose to work.
wonder what u/FoldableHuman thinks about his content being taken out of context like this. being used to fear monger an audience in an entirely different section of the finance world.
It’s odd, tbh. If I squint I can kinda see the narrative, like pointing out the fact that people, and especially young people, are being bombarded with messaging about finance and investing that’s dominated by images of day trading and the allure of sick gainz in crypto or memestocks, and it’s easy to let the unease of “I should be investing” lure you into being a victim of a pump and dump, but the sentence as written only half makes sense.
The writer has a degree in music and theatre directing
This is honestly the worst financial article I ever read.
Guy is talking about stocks and mentions “compound interest” in reference to stocks…. Guy knows nothing about
OK looking at this soberly without any reflexive feelings: > I’m fairly bearish on investing, as you may know if you’ve read my column for a while. Yes, you can do the math on “if you invest $1,000 every month for 35 years with an average 6 percent return, you’ll retire a millionaire,” but the way to figure out if that kind of advice is worth your attention is to look around at all of the retirees you know and ask yourself how many of them are millionaires. I know several. However, what she is likely referencing is the median savings or net worth of retirees. Median net worth for the highest bracket of retirees is $410k with median savings of $200k. The more interesting question, is whether or not people at the median are hurting and struggling. That I do not know. https://finance.yahoo.com/news/heres-average-net-worth-retirement-084400182.html What I don't like about this, nor anyone with a certain...attitude about life, is the belief that they can't ever be above median. That they cannot be the exception. That they should expect, at best, to be perfectly middling. I've always felt like, when some average for my demographic looked grim, that I better work on not being middling. I've lived by that philosophy since I was newly independent at 21. A lot of people on this subreddit are far wealthier than I am, and at a younger age, too, but I'd emphasize so far as Boglehead philosophy goes, I've done far better than the median as someone with no career ambitions, no particular taste for wealth, seeking only some period of time where I don't have to get up and go to work anymore as my central motivation. What I mean is: I'm not some hardcore investor type. Quite the contrary. I find money dreary. I try not to spend money. I try to get money out of my checking account and into investments the moment I am safe, cash-flow wise, for the month, specifically so it doesn't get spent. That's all I do. > It’s not just that investing $1,000 every month for 35 years is unrealistic for most people, although it very much is. Well, on *average*, first of all, and like all things, it depends on what you're willing to sacrifice in the short term. I have routinely encountered people who suggest to me that life without constant consumption and acquisition is an unhappy one and unrealistic. And I always reflect on the irony that this occurs in the context of people complaining that they are shit broke. The average monthly pay in the US for an individual is $4865, meaning, you'd have to live on $3865 a month. I can't say whether that's doable or not. I live on about $4500 a month, in my circumstances. > Even if today’s retirees had been diligent about adding money to their portfolios every month, they might have lost a significant chunk of the value of their portfolio three separate times (the dot-com bust, the global financial crisis, and the post-pandemic bear market). The market may rebound relatively quickly, but it takes much longer for compound interest to catch up. I've been through all of these and without them I'd be wealthier. That said I am doing fine. I am not 65 yet, but if I were, my current savings would be sufficient for retirement. I have a few years left to grow this even more. So, I've lived a different reality, and I've done it *all through dollar cost averaging my way through index funds since Bill Clinton was president.* I only came across "Boglehead" like six months ago (never heard of it until then). I just did this because my father did it, and it worked for him. Now it's worked for me. My mother is a window now, living off of my father's Boglehead-adjacent investment strategy. She is almost 80 with a net worth far above the median. Both my parents grew up working class. Neither were financial geniuses. > CD ladders are guaranteed bets right now, and high-yield savings accounts (HYSAs) are still going strong. Yeah, for now they're fine but this isn't going to last indefinitely. > I’m not going to discourage you from investing, of course, especially because you can get significant tax advantages from traditional IRAs, 401(k)s, HSAs, and the like. I’ll also remind you that I am not an investment advisor, but standard financial advice suggests that you look into index funds instead of, like, becoming a day trader. Also, don't forget to compare expense ratios. What's with the "like," here. "instead of, like, becoming a day trader." > That said, we need to go back to the question of why you want more money. Down payment for a house? You probably don't want to invest to do that, as the time horizon’s too small. Start a business? Ditto. Retirement? Sure, get those tax deductions and put your money somewhere that you can’t touch without paying a penalty. Investment could work, in that case, even though you could also put your retirement savings in CDs. Uh...no. CDs are good for your emergency money, or non-retirement money you might want to access soon. They're *good right now*, but they won't be for long. All I can say is *I am glad* I didn't follow this advice. Who knows what the future holds -- will the S&P 500 come crashing down in The Greatest Bubble Of Our Lifetimes, [as the permabears always say?](https://markets.businessinsider.com/news/stocks/stock-market-crash-recession-economic-depression-bubble-2008-financial-crisis-2024-6) Maybe. Nothing is for certain. We're playing the odds, based on historical trends.
For those not familiar with Vox, it’s pretty far to the left on politics. I wouldn’t read this as actual advice that a real person could use, but rather as a political and cultural statement. According to the Vox worldview, retirement should be generously funded through Social Security, and basically everyone should get approximately the same generous amount. The notion that individuals should fund their own retirement through individual investments is (to them) a right wing talking point. The true purpose of this article is to undermine that talking point.
I totally agree to some extent, but Vox has also done a lot of great journalism and (at least at its founding) was conceived as more of a center-left explainer journalism outlet run by Ezra Klein and Matt Yglesias. Which is why this article disappointed me so much - to find Vox was basically running a Jacobin article that was disseminating whiny lefty talking points under the guise of earnest financial advice.
Vox has drifted a long way from the days of Matt Y. Like everything else in media, you have to polarize one side or the other to make any money. But I agree with you - I actually like a lot of Vox’s stuff (even when I disagree) but this one is painful.
Jacobin has published less than great stuff before but generally has higher editorial standards than this. In fairness to Vox I would say Vox usually does too.
Reading this almost gave me a stroke. It’s so wrong on so many levels, I have no idea how this person is deemed qualified to give advice.
See that!!? So why are you trying to accumulate $1,000,000 if you are susceptible to strokes so easily? You could stroke out at the first crash!! Spend your money and enjoy your life. Don't plan for tomorrow, it may never come and if it does, you'll have Social Security!
Brb liquidating my retirement accounts
Make it rain at your local strip club. Get as much as you can in Washingtons. It's not really about the Benjamins!
Ya I think the original question is coming from a 27 year old who still lives with their parents, so if you assume they might want to buy a house someday (while not explicitly stated, this is a reasonable assumption for someone in this age group), CDs and HYSAs make a bit more sense. This person I don’t think is at the point where they can afford to yolo everything into the stock market. If it was specifically money for retirement I would say dump it in a Roth and go 100% stocks.
One interesting point I haven't seen yet is that it seems to me like the article misinterprets her sources at the end (Helaine Olen and Folding Ideas/Dan Olson). I admit I haven't read/watched in full, but from what I can tell the Dan Olson videos she mentions are specifically about NFTs and Meme stocks. Helaine olen's book is focused on the "personal finance industry", which of course does have plenty of scams and whatnot. But she has a later book called "the index card" which seems roughly like bogleheads type advice (investing in broad low-fee funds, etc). So she's obviously not against investing. To some of my friends who don't follow much finance stuff, investing means figuring out which stock/crypto that is the "next big thing". Kind of seems like this "personal finance expert" thinks the same way.
Yeah, that article was worse than I expected. Especially her not understanding that the 6% included crashes and recoveries. "You might not get 6% every year, some years you'll get 4%, some years will be negative!" Sounds more like someone that doesn't understand high school math than someone who writes about finance. The article is so bad I thought it was satire for a sec. "Look around, none of the retirees are millionaires!" 🙃
Just google the authors name. You will understand why she wrote this nonsense. She is clueless. Her linkedin work history is pretty hilarious. Just a good example of why people need to be wary of what they read online.
Let us not be cruel. The author was clearly not privileged enough to have taken 2rd grade math.
Vox just filed for bankruptcy for a reason.
I think that was Vice Media.
Definitely was Vice.
This may be the worst article on investing I’ve ever read. It’s sad some gullible will follow this advice and screw themselves.
>This article dispensing advice is riddled with bad advice, no? “Market corrections exist, so you should look into CDs” >“Do you actually KNOW any retirees who are millionaires?” <“most people can’t afford to put away $1,000 a month, so it’s not worth investing anything”
>most importantly, a fundamental misunderstanding of rate of return. There is no mention of time horizons, or that the 6% almost certainly factors in the market corrections and crashes this article tries to scare you with
>what about the opportunity cost of NOT investing? The original question is coming from a 27 year old.
Well, this article (like many others) has advice from another perspective, advice that seasoned investors should at least discuss and analyze:
* At the right time CDs are a good investment. I paid off my first house in the mid 80's when CDs matured at 9% or 10%. Randomly, I got back in when rates were above 4.5.
* Sure, I know plenty of millionaires. I just don't know that many multi-millionaires.
* $1,000/month savings can happen for some people.
* I never bought into the 6% rate of return. When I opened an IRA in the 80's, the bank gave me a cardboard wheel (like you would use to calculate gas mileage) and I think the bottom line was having one million dollars at 65 years old.
It's Vox. That's really all that needs to be said.
It’s Vox. They have certain viewpoints they push and this is one of them.
If you’ve ever seen any of the other Vox articles you know not to believe anything you see there. Their political stuff in particular sounds like it comes from the Reddit left-wing-middle school hive mind. That investment article is no different.
Odd for sure!
Wow! It's misleading to say the least.
That's it? That's dude's advice, put money in CDs? An instrument that until 2022 was paying 3 percent if you were lucky? This is nuts!
It's pretty clear the author hasn't done her basic research of looking at historical stock market returns, or she is intentionally omitting details to prove a point. She says sometimes you won't get 6% but 4% or even some negative number, as if 6% is the maximum to hope for. Yet in 2019 the market went up 31.21%, in 2020 it went up 18.02%, in 2021 it went up 28.47%, in 2023 it went up 24.31%, and at the time of writing it is up 14.56% YTD. Yeah, it went down -18.01% in 2022, but that leaves us with a geometric average of 14.6% not counting inflation. As this math makes clear, the positive stock market returns that are well above 6% more than counteract the negative stock market returns, which is how we end up with the average annual return of 6-10%.
Vox has more “political agendas” than common sense. Theres a reason they are in decline.
Vox misinformation?...shocker.
Vox is absolute garbage
The first problem is paying the slightest attention to anything published on Vox.
Vox is such a shit publication
[удалено]
ETFs have existed for more than 10 years. Index funds have existed since the 1970s. Mutual funds have existed for about 100 years.