Quote:
Originally Posted by rustyp
However only 55%of Americans are invested in the stock market. Just a hunch retirees are invested much higher in bonds than equities thus the "AVERAGE" of 9% bis not accurate across the entire population. The fuzzy math needs to get fuzzier.
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We LIVE by the choices WE make. As far as bonds, in the old days people would could build a treasury bond ladder. Treasuries were secure and paid the rate of inflation plus 2%. You paid federal tax on the interest so you had zero risk and were mostly even after paying the federal tax. Those days, that option does not exist for us. CPI is 8% treasuries are paying. last time I looked 1.7% and that is before TAX
Everyone's finances are different. Truth, REALITY, many do not understand what they have, what they need and their level of risk. Average? You can look up the national debt clock. TRUTH I need to collect my courage to look. As I recall the average American has 10,000 in savings and owes 85,000. That is actually OLD, As stated I've not look in along time. People in the Villages are not AVERAGE.
As far as BONDS. A bond fund that pays more than, normal investment grade bonds,
is invested in some lower grade bonds, some bond that mature in 100 years and are leveraged-they borrow against bonds they hold to buy more bonds. Far more risk than many realize they have taken on.
As said, we live with the choices we have made. Sale of a stock, a bond, a home etc, you are buying it from someone who has chosen to sell it. The Villages started as a trailer park. Homes are now selling on a regular basis for half a million. No one is right all the time. You increase your money, your wealth by being right more often than being wrong.