Thank you for taking the time to write this out bro appreciate it more than you know, initially reading your thread I also thought “2 mill by 25 ” but this made things much clearer and sound doable, I am already at the 5-10k mark and going to try apply this, as of now I have not compounded a single $ and have everything has just been sitting. Going to look more into it and learns the hows, wish I knew this 8 years ago when I started, but I’m still only 25 so by 35 I will be set if all goes to plan.
Quick question, is there any risk factor putting my money into something like s&p 500? I am a complete noob when it comes to this stuff, going to look into myself right now but also would love to hear what your thoughts are on the risk side of things.
Also one more thing, we are about to finalise a sale of our house, it is being sold for 360k €, would compounding like 200k of be a huge risk? How would that go?
Remember I am a complete noob so forgive me if these are dumb questions and thank you in advance
This is the magic of it: being set by 35.
This is the bit no one gets.
Your 25-35 will be tight, and you won't start touching the money till 45-50, BUT, when you're 35, imagine your peace of mind. You can just earn and spend. Every month. No stress, no fear, no worry. Your ENTIRE life is set. Every decade extra you live you'll be exponentially richer. That's gold.
Nope, there's no risk putting it into the s&p 500. Not for a lifetime compound. You might get unlucky and spend 2 years putting money in, then the stock market crashes 30-40%. On paper it'll look miserable, but it's now 30-40% down and you're still buying, so you're getting in cheaper. Over 10 years, your worst case is maybe 3-5% if it's a bad decade(like 2000-2010). Over 20 years it's going to be 8-12%, maybe 7% on a really weird 20 years. Over 30 years you're almost certainly looking at 9-11%
The stockmarket isn't going to 0
If it does.. Well. Something went really wrong with the world and we're probably all fucked anyway.
Compounding 200k wouldn't be a risk, no.
Real estate only compounds at 4-5% in the US, so you're far better off in the s&p 500.
It's better to put $200k into it and compound at the 9-11% over 30 years and just get a normal mortgage at 5-6% and pay that off than it is to put the $200 down on a house.
$200k in VOO over 30 years compounded at 9% is $2.6m.
That means in 30 years, that $200k you'd have put in a house, would turn into a yearly, tax free $78k per year if you take 3% sbloc loans.
All this is easy, but the one thing it needs is patience.
Most people will tell you to fuck off if you talk about 30 year timelines
Heck, people can't wait 6 months to make money. THey want NOW NOW NOW.
What they don't realize is 60-90 can be 30 of the best years of your life if you have financial freedom, or it can be an absolute miserable hell if you're poor.
Because you only engage with people who do not question what you write.
If they dont agree, you call them "poor"
At no point did I call someone "poor" because they disagreed with me. You are literally just making shit up, and THAT is the reason I don't engage with you.
