somewhat idealistic saving article

**buildmybudget** · 10-06-2009, 08:04 AM

It can be pretty difficult selling the idea that you can retire rich if you invest a couple hundred bucks a month. It's almost like selling thin air! It's easy to sell it when you use an annual rate like 10% though. =)

**PetMom** · 10-06-2009, 08:04 AM

I think that article has a good advice but nowadays a lot of employers are not matching funds (that I have read about - maybe they will go back to that).

Maybe he is referring to an investment that has on average through the years averages out at 10%. Some years low and some years high.

This is a slow and steady approach and he is not pushing the 'get rich quick' system.

**PetMom** · 10-06-2009, 08:10 AM

This technique can actually be feasible if a 20 year old starts this and is consistent in saving and then retires at 65 or 70.

This used to be quite common investment advice and does add up.

During bad economic downturns this does have some problems for some who are paying medical bills, higher medical insurance and have employers who are cutting back on retirement funding/benefits.

The author of the article should be reachable by email and might have some tips where the 10% is to be found (keeping in mind also any would be taxes that might be imposed even if cashed in as the retiremtn nest egg.)

**disneysteve** · 10-06-2009, 08:32 AM

Originally posted by KTP View Post

They sort of leave out the part about where you can find a 10% return year after year...

Despite all that has happened in the market the last couple of years, there are still plenty of funds that have great track records, including the recession years.

I own 2 particular funds: VGHCX and HRTVX. I've been in both for more than 10 years.

VGHCX has a 10-year return of 9.5%/year
HRTVX has a 15-year return of 9.64%/year

It isn't quite 10%, but it is darn close. So it is possible to approach that 10% mark. The problem is there is no way to know today what funds will post those types of numbers 10 years from now.

**KTP** · 10-06-2009, 08:38 AM

My wife has 11 fund options in her fidelity 401k account (well, until recently, when they added a S&P500 tracking fund). The best fund of the 11 has returned an average of 2.3% over the past 10 years. Oh, and this fund has a management fee of 0.6%

So how is that easy one million looking now?

**disneysteve** · 10-06-2009, 09:13 AM

I agree, KTP. The 2 funds I mentioned aren't my only holdings. I also own:

VFINX 10-year -0.23%
VWIGX 10 year 4.09%
and a few others with similar numbers.

10% isn't reasonable to assume in the best of markets. I'm guessing the author used 10% just because it is a nice round number though not a realistic one.

**woodie96** · 10-14-2009, 06:43 AM

I remember my days in the military, going to "required" financial training. The numbers they used to show, just seemed so surreal to me that surely it wasn't that simple. Hence, never took advantage of it. At the time, those numbers looked like a pipe dream.

**Broken Arrow** · 10-14-2009, 06:48 AM

I don't know exactly why, but Yahoo Finance really has been the bottom of the barrel in terms of financial articles.... It's as if they have no quality control and are willing to print just about anything. Instead, I recommend:

bloomberg.com
morningstar.com (but NOT their forums!)
businessweek.com
thestreet.com
marketwatch.com
walletpop.com

Some of these sites are hit or miss with their articles, but overall, I have found them to be informative.

**momula** · 11-26-2009, 06:29 PM

Yeah, advice for newbies really, comes in handy when its a subject I dont undeerstand

**zeldo** · 11-27-2009, 05:29 AM

10% is completely unrealistic. Also you need to discount inflation, which I believe is being under reported. Working for 30 years then retiring for 20 years just does not work.

somewhat idealistic saving article