undefined | Better HN

0 pointsclickety_clack3mo ago0 comments

Investing in the S&P 500 for 10 years will on-average double your money, and that’s inflation adjusted. Over 40 years, you 10x on average, again inflation adjusted.

0 comments

itake3mo ago

> on-average double your money

yeah. that is my point: for many people, "double [your spare] money" means going from $1 to $2...

Tech (and finance) workers have always had a surplus of wages enabling a comfortable life and plenty left over for investment. Personally, my 'worst' year investing my wages is when I only saved 50%. Currently, I save 70% of my after-tax income. As a result, "double your money" is a very meaningful number.

But if your wages are closer to the average stagnating wage-growth that doesn't keep up with inflation, double $0 or double $1 isn't meaningful.

seec3mo ago

Yep that's pretty much it. And in France (I believe most of rich Europe as well), there are mandatory "social contribution" on capital gains which are collected directly by the banks. So if you don't have much money "working" for you, they will take a good part of whatever small gains you made.

So it doesn't go down, but the gains are so small it's kinda pointless. Of course, those who can save a lot every year get compounding benefits quite fast, but is a class that is becoming more rare every year passing.

j / k navigate · click thread line to collapse