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Yes, the assumption is 10% ROI. That is what the market has done over the past 100 years. If you want to assume a 6% return, I still make $1.1 million over the 30 years. You seem to think the market will stagnate over the next few years. That is possible. Do you think it will stagnate over the next 30-40 years? That is my investing horizon. If you think the market will be stagnant or decline over the next 30 years you are betting on something that has not happened since the market began.
You are correct in that my risk tolerance is on the higher end of things...yes that is a function of my age. It is wise to move investments into less risky vehicles as you age. It is unwise to use those low risk investments when you are young, however.
I thought I did reduce my profits by the interest paid, my total return was almost $3.5 million in the example and I only claimed $3 million in profits. That is my initial investment minus the interest paid.
To the last question, yes I am diversified within the equities markets. I do not own bonds or gold right now as it doesn't fit with the profile for my age. In time I will move funds from equities into safer, income style investments. I am in no way advocating the same cookie cutter approach for everyone, I am saying that for those with a longer term to invest this strategy may make sense.
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Rick
1984 911 coupe
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