Page 62 - Ready Set Retire

Stephen J. Kelley

Figure 7: Dow Jones Industrial Average 1983-2010

“But hey, 6.72% is nothing to scoff at, right? And there isn’t
anything better than the markets for savings. So, I feel pretty
good,” you say, poking me in the eye, yet again.
Ducking, I say again, “Wait a minute. What if you could have
gotten a safe, compound interest rate of say, 5% during that
period?”
“Five percent?” you scoff. I got almost two percentage points
higher. How can five percent possibly compete?”
Let’s look. Here’s a chart showing five percent rate of return
during that same period, compounded with no risk:

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