This is not for or against any President, but solely based on facts. There are several aspects to this discussion:
This is not for or against any President, but solely based on facts. There are several aspects to this discussion:
1. Comparing savings return to stock market return is like comparing apples to oranges. Savings based returns is to secure the lifelong savings, and is directed toward individuals averse to risks, and preferably, for those individuals who believe in their hands-on work and knowledge.
2. When it comes to stock market, doubling in five years means that the rate of return is around 14% annually, whereas the GDP of the country and the world is growing at 0 - 5% at most. This kind of returns mismatch is the primary cause for repeated stock market crashes in the recent years with a smaller fraction of the population prospering at the expense of the majority. There are real stories of people reeling still trying to recover from the 2008 crash.
3. Moreover, with globalization combined in tandem with consumerism, these returns are also largely tied to consumerism around the globe, which is not a sustainable model for the long run.
4. Further, savings rate are at the lowest level in a while, which limits savings based returns pushing money further to stock market, compounding the stock market return.
5. At some point in time, we will realize this sugar high can't continue for ever.
6. Does it mean myRA is the right strategy? That is a different question, which depends on multitude of factors.
By the way, myRA sounds like my daughter's name.
Originally shared by Jim Feig
Obama’s retirement fail https://www.politico.com/agenda/story/2018/06/07/myra-save-for-retirement-obama-program-000662 -via Flynx
https://www.politico.com/agenda/story/2018/06/07/myra-save-for-retirement-obama-program-000662
1. Comparing savings return to stock market return is like comparing apples to oranges. Savings based returns is to secure the lifelong savings, and is directed toward individuals averse to risks, and preferably, for those individuals who believe in their hands-on work and knowledge.
2. When it comes to stock market, doubling in five years means that the rate of return is around 14% annually, whereas the GDP of the country and the world is growing at 0 - 5% at most. This kind of returns mismatch is the primary cause for repeated stock market crashes in the recent years with a smaller fraction of the population prospering at the expense of the majority. There are real stories of people reeling still trying to recover from the 2008 crash.
3. Moreover, with globalization combined in tandem with consumerism, these returns are also largely tied to consumerism around the globe, which is not a sustainable model for the long run.
4. Further, savings rate are at the lowest level in a while, which limits savings based returns pushing money further to stock market, compounding the stock market return.
5. At some point in time, we will realize this sugar high can't continue for ever.
6. Does it mean myRA is the right strategy? That is a different question, which depends on multitude of factors.
By the way, myRA sounds like my daughter's name.
Originally shared by Jim Feig
Obama’s retirement fail https://www.politico.com/agenda/story/2018/06/07/myra-save-for-retirement-obama-program-000662 -via Flynx
https://www.politico.com/agenda/story/2018/06/07/myra-save-for-retirement-obama-program-000662