what are the rewards...like whats the worst that could happen?
52 Week Money Challenge
- Thread starter Steve Piffler
- Start date
what are the rewards...like whats the worst that could happen?
DigitalDopeman
All Star
at the bolded. I don't carry any cash but if I did, that'd be the way to go.
You should put that 10% into a brokerage acct instead of savings. I started doing that in Jan of last year and have gotten a 12% return in just the last year. That beats the shyt out of the 0.9% APY I get from my savings acct.
give me some info on how to do that homie
BlvdBrawler
Superstar
Well the rewards are the high returns. 11.7% is sick; it really exceeded my expectations.
But, like any investment, there's no guarantee. That could just as easily have been negative 11.7%, but the market did well over the last 12 months so it worked out.
Worst case scenario is that you're down for an extended period of time, and you cash out at a low point. Example... Lets say you invest 10k a year for 5 years. Lets say for that 5 years, the market is down 10% on average. You will have invested $50,000 but you will only have $37,412.37 in your account. At that point, you're only looking at paper losses, but if you decide that you've had enough, you can cash out and take that $37,412.37 and go elsewhere with it for a net loss of $12,587.63
Now, that's an extremely unlikely scenario for a lot of reasons, but that's why it's called "worst case scenario". Conversely, if the market was up 10% over that 5 years, you'd have $68,169.78 in your account, with a net gain of $18,169.79.
Last thing to remember: When investing, 5 years is a drop in the bucket. To really take advantage of compound interest, you need to let the investments marinate for 20-30 years. That's when the interest starts getting ridiculous, and millionaires are born.
Edit: Or, to make it more simple...
National average rate for savings accts is 0.07%. 50k invested at 0.07% over 5 years will be worth $50,105.13 (a gain of $105.13).
If you were to earn 11.7% annually in an investment account (pretty unlikely, but possible), your 50k would be worth $72,000.40 (a gain of $22,000.40)
ThumpDaddy
All Star
I'm gonna do this, but I'm gonna start with $2 dollars instead of $1. The problem is that it's so simple, but so many people live paycheck to paycheck that they don't think of it that way.
BlvdBrawler
Superstar
Breh I did the same shyt with Sirius as well as Bank of America.
Good news is, there's always another train coming. Since you got cash now, just be on the lookout and strike when the opportunity rises.
ThumpDaddy
All Star
I'm going to do this but start with $2 dollars instead of $1. And I'm gonna get my daughter up on this too. This would definitely be something for her to do since she's only 8 years old.
Breh I did the same shyt with Sirius as well as Bank of America.
Good news is, there's always another train coming. Since you got cash now, just be on the lookout and strike when the opportunity rises.
Too bad I put what I made from Sirius into Dell when it was at $15
now I have to wait and be calm. Facebook was under $20 I should've capitalized on that.
BlvdBrawler
Superstar
Too bad I put what I made from Sirius into Dell when it was at $15
R.E.N. Spells Ren
Veteran
Yeap it's completely legit. They invest in a combination of Vanguard ETFs and iShares bonds. Lemme screenshot it. There's really nothing preventing anyone from investing in this mix on their own, they just do it for ya and handle the re-balancing and dividend re-investment automatically. I don't know about a prospectus, they've probably sent it to me but I throw all those away anyway. Quarterly reports do come tho.
I misspoke, I hadn't checked in a while. Your returns are on par with mine over the past 12 months. I was just going off the fact that in June, my ROI was at -0.15%
Mine is set up by my financial adviser who also provides general financial advice as well.
But yea, folks gotta remember that the return isn't guaranteed with a brokerage account, and you can lose value...especially in this economy.
BlvdBrawler
Superstar
I misspoke, I hadn't checked in a while. Your returns are on par with mine over the past 12 months. I was just going off the fact that in June, my ROI was at -0.15%
Mine is set up by my financial adviser who also provides general financial advice as well.
But yea, folks gotta remember that the return isn't guaranteed with a brokerage account, and you can lose value...especially in this economy.
I think I was at like -2.xx in June. shyt was ugly back then.
innocentdevil
:whoo:
I'm in 