Great Expectations
In 2000, Jane and John were 35 years old and wanted to prepare for retirement. Their financial advisor told them that if they invested in stocks, they would average 10% a year over the long-term and that retirement would be attainable. They decided to invest $100,000 in their 401(k) and expected to have about $1,745,000 when they retired.
​
Today, Jane and John are 58 years old, and they’re not even close to the retirement they thought they were going to have. The S&P 500 Index is up 191% since 2000. That means Jane and John’s 401(k) accounts have grown from $100,000 when they started in the year 2000 to $291,000 in 2023. They are now realizing they are nowhere close to the $1,745,000 they thought they would have when they retired at age 65. Their rate of return was only 4.5%, not the 10% they were promised.
​
Source: advisorperspectives.com
History Repeats
Did Jane and John just choose a bad time to invest? History reveals that the Wall Street casino has been perfecting these booms and busts for over a century, all the while promising “average” returns to regular people.
​
This graph shows stock market trends for over 100 years. The dotted lines indicate how long it would take investors to recover their initial investment.
​
These aren't the returns they were promised.
​
Source:
Lance Roberts, CFA, Realinvestmentadvice.com
