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Discussion in 'The Cocktail Lounge' started by TomB16, Feb 18, 2023.
I have $600 per month to invest for 25 years. What is the best way to get rich over 25 to 30 years?
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Joking aside, "rich" is a term that I suspect has a different meaning or definition by varying degrees to individuals. What may seem "rich" to one may be small change to others and so on. So it's difficult to measure in terms that many would agree on.
Here is a simple, basic example: One could open a Roth with the $600 around 1993. That person could buy a Total Stock Market Index fund and contribute the $600 per month as suggested all the way to 2023. Currently, they would be sitting on a little over $1.4 million roughly. No extra thought, no extra market analysis, no decisions other than make the contribution. Of course that is backward looking, but you get the idea. Simple and little effort other than "work equity." Is that rich?? Depends on the individual and so many things. Some will never obtain that amount. Others could spend it in a year or less.
If they also had a work related retirement plan of some sort with some company matching, well that would just add more money to the piggy bank on top of the Roth directed plan. I'd say they would have a pretty nice nest egg at the end and depending on their lifestyle could have a comfortable retirement.
I'm kind of old school though. I think people get caught up in the "rich people" thing too much. We are surrounded by it. The TV, the sports stars, celebrities, and even the neighbor down the street. Investing can be that way too. Getting caught up in the "other person" must be doing better, chasing silly things,...and so on. Nothing wrong with being motivated or driven to achieve lofty goals. Something has to drive us all to move forward.
I'm more of a live within your means, work a good job and succeed within it when possible, develop a sound financial plan during work and also for retirement, save and contribute to that plan, be thankful for your health and family, and simply be satisfied with being "good enough" through it all.
Okay, I went off on a sermon or something...sorry about that. Anyway, good thought provoking question TB16.
Blackrock and Vanguard have some solid choices available. Beating the SPY is a good Guage to use for the longtermers that like to set it and forget it. Reinvest dividends is like a compound bow if your invested in the right security.