imported_River17
TB Veteran
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It seems to me that it is set up now that the only way a person can manage to save and grow money is to invest it in themarket. With interest rates being what they are it really is'nt that profitable to simply put your money in a savings account or even in the bond market because the returns are so poor. So in order to make any respectable gains you have to put your money in the highly volatile stock market and hope you don't lose your shirt.
Traveler
You are correct that you will have more net gains investing in the growth of companies by having an equity stake in their future growth than you would make by lending them your money in fixed income vehicles.
You always need to look at the taxes and inflation that eat into any gains.
So if you have a bond fund yielding 5% and inflation is 2+% and you are in the 25% tax bracket (rich folks are in the 35% bracket) you are lucky to net a 2% gain. With the devaluation of the dollar you may even be losing buying power later on.
If on the other hand you can invest tax differed like in a 401K plan or a Roth IRA your money will grow that much quicker if you can average a 10% return or better.
Today it is not good enough to just invest in the Fortune 500 companies like you would with an S&P 500 fund or a Total Stock Market Fund, but you also have to have some of your money invested overseas to protect yourself from the decline of the US dollar.
Plus International Stock Funds have been seeing some very handsome returns the last few years. Some over 30%. You only have to look at the growth in China and India to see that many International companies are seeing some spectacular growth.
We'll just be flipping burgers and counting our money.
:smilie_132: