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If you invested $1 a day, starting when you were born

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Re: If you invested $1 a day, starting when you were born

#91

Post by toado85 »

bradleyjg wrote: post #44
toado85 wrote: post #28

Hey guys... I made the page. Just saw lots of traffic coming from here so figured I'd come check it out. A couple things I figured I should address after reading the comments: 1) Yahoo!'s historic S&P 500 data does not factor in dividends. So the returns would likely be 1-2% higher each year (which over time makes a very big difference). I should probably add a note on the page mentioning this. Here was my conundrum…

Nice site. You may want to look at Robert Schiller's (of Case-Schiller index fame, among other things) data set available here: http://www.econ.yale.edu/~shiller/data.htm He has S&P dividends by quarter back to 1871. Fees do make a difference, though they are pretty small in e.g. VFINX -> VFIAX. If you want to be super realistic you could build up the dollars a day at say the federal funds rate until you hit the VFIN…

Just updated to include dividends / dividend-reinvestment on by default. Thanks!

Re: If you invested $1 a day, starting when you were born

#92

Post by sophacles »

JoeAltmaier wrote: post #81
sophacles wrote: post #80

Earlier quoted context omitted.

I'm not saying you aren't - I'm saying that assuming a 7% apr for the last 15 years from banks is not a good one - a savings accounts and CDs just don't pay out that high. Even if you got some big gains early (80s and early 90s) - the very low compounding rate since 2000 will squash those bank returns.

Not quite true. Early money dwarfs later money in any calculation. But the last 15 years would certainly put a damper on things. Would be nice if the app calculated real interest return for us!

Because I was curious, I looked up historical cd rates and got this: http://www.forecast-chart.com/rate-cd-interest.html

So i did this: https://gist.github.com/sophacles/a4469f5c656e09e4bc1d

(Note from the end of the chart linked til this month, I assumed the same interest rate).

And found that investing the once a month in a 6 month cd, with a dollar amount equal to the number of days in that month, plus reinvesting the amount coming due (principle + interest) that month from previous CDs, would yeild way less than the market according to this calculator:

In the CD case - just under $90K In the stock case - just under $560K

If my math turns out to be incorrectly done - please let me know I like to learn, but I think I did this right.

Re: If you invested $1 a day, starting when you were born

#93

Post by susiecambria »

A complete non-techie here. My takeaway is this: Wow, look at the value of saving and I've got to invest--not just save--for the first grandchild starting tomorrow.

My dad was banker and a saver so I grew up valuing saving just because. Like others here, the site makes it easy to understand how saving (as I read it, and yes, I know there is a difference) can yield lots of money! Now to share this with those in the social services world in DC so they can use it in their financial ed classes.

Re: If you invested $1 a day, starting when you were born

#94

Post by washadjeffmad »

If you invested $1 each day of your life into a savings account, you'd have $0 for perpetually owing the bank maintenance fees.

My mother took us to the local bank one Christmas when we were children and put $100 each (interest rates were at a peak) into our accounts "so that we could learn about money". Five years later, we went back and found the bank had emptied the accounts steadily each month until nothing remained. The kind man who'd once helped us open the accounts was very apologetic about it, but explained there was nothing he could do to get it back.

That experience did teach me something about money, that you can't always count on it to be there and to be careful to whom you entrust it, but it also taught me about the banking system and saved me from simple mistakes I saw my peers making as I got older. I wouldn't have started investing so young if banks had never put a sour taste in my mouth.

Re: If you invested $1 a day, starting when you were born

#95

Post by teekert »

matt_wulfeck wrote: post #90
teekert wrote: post #24

Earlier quoted context omitted.

Nice comparison! I feel the same about my education, pays back about my total investment every couple of months. Of course in my country (Netherlands) I pay back a lot more in taxes.

Just out of curiosity, how much do you pay in taxes? If you're a sillicon valley engineer on the higher end, you end up paying 30-40% federal + 10% state and local taxes.

This is the most recent table: Belastingschijf Wage(per year) Loonbelasting

schijf 1 € 0 t/m € 19.922: 36,55%

schijf 2 € 19.923 t/m € 33.715: 40,15%

schijf 3 € 33.716 t/m € 66.421: 40,15%

schijf 4 € 66.422 or more: 52,00%

Re: If you invested $1 a day, starting when you were born

#96

Post by jack-r-abbit »

toado85 wrote: post #88
mason55 wrote: post #46

Earlier quoted context omitted.

Yeah I thought this would be a dramatic example of compound interest. Instead my total matches about 3 months worth of principle for me nowadays.

Just added dividends / dividend reinvestment. This makes a huge difference if you go back in the 70s and earlier.

Huge difference for me. Put it up at $273k. A bit more than double what it was.

Re: If you invested $1 a day, starting when you were born

#97

Post by matt_wulfeck »

teekert wrote: post #95
matt_wulfeck wrote: post #90

Earlier quoted context omitted.

Just out of curiosity, how much do you pay in taxes? If you're a sillicon valley engineer on the higher end, you end up paying 30-40% federal + 10% state and local taxes.

This is the most recent table: Belastingschijf Wage(per year) Loonbelasting schijf 1 € 0 t/m € 19.922: 36,55% schijf 2 € 19.923 t/m € 33.715: 40,15% schijf 3 € 33.716 t/m € 66.421: 40,15% schijf 4 € 66.422 or more: 52,00%

That's comparable to what we pay here in California, minus all of the nice social programs and universal healthcare.

Re: If you invested $1 a day, starting when you were born

#98

Post by teekert »

matt_wulfeck wrote: post #97
teekert wrote: post #95

Earlier quoted context omitted.

This is the most recent table: Belastingschijf Wage(per year) Loonbelasting schijf 1 € 0 t/m € 19.922: 36,55% schijf 2 € 19.923 t/m € 33.715: 40,15% schijf 3 € 33.716 t/m € 66.421: 40,15% schijf 4 € 66.422 or more: 52,00%

That's comparable to what we pay here in California, minus all of the nice social programs and universal healthcare.

Healthcare (obligatory but subsidized for lower incomes) will cost you an additional 95 euro/month (with an "own risk" of about 375 euros). I always thought the entire US paid a lot less taxes to be honest...

Re: If you invested $1 a day, starting when you were born

#99

Post by matt_wulfeck »

teekert wrote: post #98
matt_wulfeck wrote: post #97

Earlier quoted context omitted.

That's comparable to what we pay here in California, minus all of the nice social programs and universal healthcare.

Healthcare (obligatory but subsidized for lower incomes) will cost you an additional 95 euro/month (with an "own risk" of about 375 euros). I always thought the entire US paid a lot less taxes to be honest...

Thankfully as a valley engineer your healthcare is mostly paid for by your company.

The maximum federal tax rate is 40%, with California's rate being something like 10%. Most people don't pay the high end. Rich people generally have tax accountants and attorneys that are able to navigate the overly complex US tax system to find every loop hole. The majority of taxes are paid for by the upper middle class.

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