Assuming an average of 7% annual return:
> x * 1.07 ^ 70 = 8200000
> x = 82000 / 114
> x = 72000
Essentially if you sock away $70k at age 26, that's how much you'll have when you're 96
But obviously that's not what's stopping us from socking away $70k at 7%.
In any case, if you believe your charitable donations are better off invested in the stock market than being put to charitable work today, then why bother donating? That means you don't believe in the charity. It would be better to find a more effective charity!
As to putting money to charity today I agree that might be a better idea.
[EDIT: Even with dividends this particular time period in Japan yielded terrible returns. Investing in the stock market for long periods doesn't guarantee returns, nothing does, but it's a pretty good probability.]
only in the aggregate. You might hit a particularly bad spell , or some black swan event happens just as you need to liquidate the holdings.
Stock needs management of some kind (even if it's index, you'd still need to decide when to liquidate, and seize the earnings while high rather than keep betting until you require the funds).
Investing a lump sum is a risk -- you'd cut your fortune nearly in half if you invested in 2008. This isn't an issue for most folks who save over time.
Frankly, the largest thing stopping folks from investing is financial literacy. The second largest thing is probably lack of disposable income.
I'd bet 7% YoY over 20 years is conservative.
There is no 30 year period in the history of the s&p 500 that returns less than 7% if I remember correctly.
How does one gain it? Everywhere I look, there's so many scam artists and so much confusion that I don't know what's true / reasonable anymore.
FV = PV * (1 + i) ^ t
FV and PV are in dollars, i is a percent, and t is number of years.
We know FV, i and t and can solve for PV.
8,200,000 = PV * (1 + 0.07) ^ 70
PV = 8,200,000 / 1.07 ^ 70
So 72,000 compounded over 70 years at an interest rate of 7% has a future value of 8,200,000.
You’re missing a few zeros, there. Makes the whole thread really confusing, I thought people were talking about this idea that 720 == 72,000, which I found surprising.