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foreman-541 t1_j58ubja wrote

Reply to comment by Pshieldss in LPT Request: turning 16 this year, what is something i should/shouldn’t do? by yelloroadintheusa

2000 this year should grow to 1 million by the time you retire. Do it for the 5 years and you future self will thank you for years

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OG-Pine t1_j5c32qb wrote

$2,000 put in at 16 would be worth ~$60,000 at age 60. It’s a lot of money but it’s not a million haha

Edit: assuming 8% yoy growth (market average)

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foreman-541 t1_j5ezi1h wrote

I assume 12% (avg return for S&P 500 since inception to 2021), and retire at 72

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OG-Pine t1_j5fkjeo wrote

SPY since 93 has a CAGR of ~9.5% and US large cap since 72 ~10.22% (and this is without accounting for inflation)

You would need to be incredibly lucky to have a long term return of 12%, most people agree that 8% is a realistic return rate over a lifetime but you should still plan for 4-6% because you can’t know which end of the average you’ll fall in.

But yeah if you got 12% average for 56 years then you’d have a million with 2k put in today

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