Example: you bought 4000 shares in a fund valued $50 per share with $200,000
During the 20 years the fund went up to $200 per share and you sold it, you will get $800,000 less your 200 and all you have is $600.000, hardly 1 million, and that’s assuming you sold it at 200.
If during the 20 years the fund paid dividends, you would probably reinvest them and pay tax each year, and even then you will hardly have your 1 million, your fees will probably eat up your dividends.
If I could get a guaranteed 8% return in a fund, I be the first one to invest in it.
Your return on a fund is only calculated when you sell it not before.
A mutual fund is NOT a CD where it earns compaund interest.
Think of Dividends as Interest on your fund, and dont forget your fees.
Probably
if you pick the right mutual funds and the economy continues to chug right along at some point, within 20 to 100 years, you could be a millionaire Course, gasoline may be $20 a gallon and bread, when available, is $25. a loaf.
My advice is to avoid mutual funds and get a few low-cost index ETFs. Google "lazy ETF portfolio" for ideas.
You probably won't be a millionaire by age 50, on just the earnings made by your initial $200K investment. To get that wealthy, you have to keep pumping money in over the years. Be sure to keep a properly diversified portfolio and rebalance it every so often. Know in advance what your risk tolerance is: money you might use in the near future should go into lower risk vehicles.
What is more accurate is to look at what the market and funds have done in the past. You can never be certain what the future may bring. Keep in mind that the market also has a habit of losing alot at times. You need to be ready for that, also.
Your doing fantastic. Keep up the good work and you
will be a millionaire in no time.The income from my
mutual funds is giving me a good retirement.
read about rule of 72 then do math.
given number at 72/8 = 9 .
so each nine years your 200 Doubles
I'm 29 and my wife and I have saved about $200,000 to invest. I've read that most mutual funds will give me an average annual return of 8% (is this right?). If we put that $200,000 into a mutual fund, it would give us $1 million by age 50. And that doesn't even include money saved from our salaries. Is this even accurate?? It sounds too good to be true.
