U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 02-21-2018, 12:37 PM
 
Location: Paranoid State
12,685 posts, read 9,443,087 times
Reputation: 14945

Advertisements

Quote:
Originally Posted by GolfingCat View Post
That's horrible. We need to find a way to redistribute stock's.
Let's start with the following elementary school question:

What word is the plural of stock?
Reply With Quote Quick reply to this message

 
Old 02-21-2018, 01:00 PM
 
Location: Ruidoso, NM
5,170 posts, read 4,735,913 times
Reputation: 4206
Quote:
Originally Posted by TaxPhd View Post
But please, tell us all how it is wrong.
The question is, how much wealth can a person expect to accrue after 30-40 years (best guess using historical data) if they save x% of their income and put it into the stock market? Will they be rich? Will they have a comfortable retirement? Will they be able to retire early? Or will it not amount to much?

Oh ****, I was looking at the wrong post. This is the one:

"$75,000 annual income, 10% or $7,500 saved each year (1/12 invested each month, ordinary annuity), S&P 500 Index Fund. 12% average return over the last 40 years (per the money chimp website). Monthly compounding. Future value = $7,352,983, or 98 "years of that income saved up at the end" (to use your language). Drop the average return to 8% and you'd have 29 "years of that income saved up at the end" or double your stated amount."

Bogus, meaningless analysis. You can't use nominal stock appreciation if you are going to assume zero inflation, which is obviously the case.

Last edited by rruff; 02-21-2018 at 01:13 PM..
Reply With Quote Quick reply to this message
 
Old 02-21-2018, 01:03 PM
 
Location: Ruidoso, NM
5,170 posts, read 4,735,913 times
Reputation: 4206
Quote:
Originally Posted by SportyandMisty View Post
Working for a living is over-rated.
It certainly is. That's why I took my first long retirement at 30, as soon as I could. Unfortunately I had to go to work 13 years later, but now 15 years after that I'm on the 2nd one, and this one should last as long as I do....
Reply With Quote Quick reply to this message
 
Old 02-21-2018, 01:06 PM
 
Location: Paranoid State
12,685 posts, read 9,443,087 times
Reputation: 14945
Quote:
Originally Posted by rruff View Post
The question is, how much wealth can a person expect to accrue after 30-40 years (best guess using historical data) if they save x% of their income and put it into the stock market? Will they be rich? Will they have a comfortable retirement? Will they be able to retire early? Or will it not amount to much?
I thought the question is "how much wood could a woodchuck chuck if a woodchuck could chuck wood?"
Reply With Quote Quick reply to this message
 
Old 02-21-2018, 01:18 PM
 
Location: Ruidoso, NM
5,170 posts, read 4,735,913 times
Reputation: 4206
Quote:
Originally Posted by SportyandMisty View Post
I thought the question is "how much wood could a woodchuck chuck if a woodchuck could chuck wood?"
Is that real or nominal wood?

Reply With Quote Quick reply to this message
 
Old 02-22-2018, 02:32 PM
 
5,221 posts, read 2,381,873 times
Reputation: 5111
Quote:
Originally Posted by rruff View Post
The question is, how much wealth can a person expect to accrue after 30-40 years (best guess using historical data) if they save x% of their income and put it into the stock market? Will they be rich? Will they have a comfortable retirement? Will they be able to retire early? Or will it not amount to much?

Oh ****, I was looking at the wrong post. This is the one:

"$75,000 annual income, 10% or $7,500 saved each year (1/12 invested each month, ordinary annuity), S&P 500 Index Fund. 12% average return over the last 40 years (per the money chimp website). Monthly compounding. Future value = $7,352,983, or 98 "years of that income saved up at the end" (to use your language). Drop the average return to 8% and you'd have 29 "years of that income saved up at the end" or double your stated amount."

Bogus, meaningless analysis. You can't use nominal stock appreciation if you are going to assume zero inflation, which is obviously the case.
And you continue to demonstrate that you have no understanding of how tvm calculations work. You HAVE to use nominal numbers. Why? because inflation has NOTHING to do with the accumulation of dollars in the account.

Since you are unable to calculate and understand the future values that have been presented so far, let's make it even easier. I'll even give you the answers, because you have already struggled enough with this.

You put $1,000 in a bank that pays 10% interest (and inflation is zero % during the year). How much is in the bank after one year? Answer: $1,100.

Now, lets modify things slightly. Same scenario, but inflation is 5% for the year. How much will be in the account after one year? Will it be $1,100, or will the bank say, "Wait a minute, there has been some inflation, so we need to take some dollars out of the account in order to account for the inflation"? Answer: $1,100. Regardless of the rate of inflation, the bank will pay the stated interest rate, and they won't take dollars from the account to "account for" the inflation.

The key to this, that you have continually failed to understand, is that inflation doesn't affect the accumulation of funds, it only affects the purchasing power of those funds.


What's another way to look at this? It's like if you claimed that 3 + 3 = 5, because, you know, inflation!!
Reply With Quote Quick reply to this message
 
Old 02-22-2018, 02:47 PM
 
Location: Ruidoso, NM
5,170 posts, read 4,735,913 times
Reputation: 4206
Quote:
Originally Posted by TaxPhd View Post
And you continue to demonstrate that you have no understanding of how tvm calculations work. You HAVE to use nominal numbers. Why? because inflation has NOTHING to do with the accumulation of dollars in the account.
I never said anything about accumulation of nominal $. When you want to know value in the account you have to look at real $. And in your scenario you used nominal increases for the stock price but left the salary and investment amount fixed. There is no universe where that makes sense.

Your snide pedantic attitude just makes you look like a dick as well as ignorant. You know full well that one of us *is* accounting for inflation (me) and one isn't (you).

Where was the TVM in that scenario? You know, the thing you keep claiming you know, but I don't?
Reply With Quote Quick reply to this message
 
Old 02-23-2018, 09:51 AM
 
5,221 posts, read 2,381,873 times
Reputation: 5111
Quote:
Originally Posted by rruff View Post
I never said anything about accumulation of nominal $.
Actually, you did, and it has been pointed out to you multiple times. Here it is again:

Quote:
Originally Posted by rruff View Post
If someone squirreled away 10% of their income into the stock market for 40 years, they could expect to have 10-15 years of that income saved up at the end.
What you described above is a simple TVM problem. And in order to get to the 10-15 years of saved up income, a nominal growth rate is required. The real growth rate doesnít do it, and in fact, it has nothing to do with it. Why? Because the issue is accumulation of dollars, not purchasing power of those dollars.

Quote:
When you want to know value in the account you have to look at real $. And in your scenario you used nominal increases for the stock price but left the salary and investment amount fixed. There is no universe where that makes sense.
RIF. YOU stated that 10-15 years of that income would be accumulated. That has nothing to do with value, and as such, it is appropriately calculated with a nominal rate of return. The salary and investment amount remain fixed, because that is the scenario that YOU described (and that issue also has NOTHING to do with real versus nominal returns).

Quote:
Your snide pedantic attitude just makes you look like a dick as well as ignorant.
Resorting to name calling is generally the last hurrah of someone who realizes that they canít keep up. That should be beneath you.

Quote:
You know full well that one of us *is* accounting for inflation (me) and one isn't (you).
I know that you are trying to do so, but youíre failing at it. Youíre conflating the growth/accumulation issue with the purchasing power issue, and unfortunately, you donít even realize it.

Quote:
Where was the TVM in that scenario? You know, the thing you keep claiming you know, but I don't?
Every scenario/ problem that I have presented has been a TVM issue. That you are unable to recognize that is just one more piece of evidence that shows that you really donít understand enough about this to be able to engage in a meaningful discussion.

I can understand why you would refuse to answer my previous question. If you answer correctly ($1,100) you are admitting that I have been right all along, and that you have been wrong. If you answer that it will be less than $1,100, you are claiming that the impossible is happening - that someone in a bank or brokerage house is actually removing money from accounts in order to ďaccount forĒ inflation. The only other possibility is that you admit you canít do even that most basic of simple interest calculations. So, regardless of your answer, you donít look good.

Itís too bad that you havenít been able to learn anything from this. Enjoy living in your world where you believe that ď3 + 3 = 5, because you know, inflation!Ē I truly hope that that strange belief serves you well, and good luck in the future!
Reply With Quote Quick reply to this message
 
Old 02-23-2018, 11:13 AM
 
Location: Ruidoso, NM
5,170 posts, read 4,735,913 times
Reputation: 4206
Quote:
Originally Posted by TaxPhd View Post
Actually, you did, and it has been pointed out to you multiple times. Here it is again:

"If someone squirreled away 10% of their income into the stock market for 40 years, they could expect to have 10-15 years of that income saved up at the end."

What you described above is a simple TVM problem. And in order to get to the 10-15 years of saved up income, a nominal growth rate is required. The real growth rate doesnít do it, and in fact, it has nothing to do with it. Why? Because the issue is accumulation of dollars, not purchasing power of those dollars.
What I calculated was purchasing power. What a person saving 10 or 25% of their gross wages, and putting it into the stock could expect to have saved after 40 years. The only "mistake" I made was assuming that people on the economics forum would know that that nominal $ have no relevance, and that the *real* value of that savings is what matters.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top