I know this is a board for investing for retirement, but I also know there are posters here that are investing
for their kids and grandkids. Market could fall a lot more, but I have been investing for my granddaughter
since Feb. and she will get her last $5000 on Monday. Other than the fact that I could die tomorrow, and
want to get this done, because I want to be "that" grandfather, I believe she will have great returns until her
own retirement, whether I get the bottom or not.
People will say it is different this time. They always do.
Here are S&P CAGR returns for my family for the 60 years from their birth:
Brother born in 1962: 10.36%
Me 1955: 10.3%
Sister 1952: 10.38%
Mother 1930: 9.57%
Father 1927: 10.05%
Not going into everything that happened over the years, other than to say my father would have been in the
1929 crash and the following depression. Investing money Jan. 1st 1927, I am sure four years later, with a
four year CAGR of -4.6% with dividends reinvested, there were plenty that said it is different this time.
Probably not the one she would want, but my granddaughter could buy a new car with $30,000. In 1927, a
new model T was about $460. If my father had a grandfather with enough money to put the price of that
model T in the market for him, 60 years later he would have had $150,191.
My fathers net worth wasn't that much in 1987.
If my granddaughter can get a 9% return over the next 60 years the account would be over 5.2 million. In
reality, that won't happen, as I have asked my kids to use it to fund Roth IRAs with the accounts, when the
kids get old enough to work. Also, it will be her money to do with what she wants. Hopefully if she spends
it, it would be on a business opportunity, etc., and not on becoming a drug addict. lol! |
