Sometimes I can't help myself.
Message 33985650
"Those results include the $500 monthly contribution and no other outside funds.
Now, I don't know how people want to judge results but if I use the calculator below and run the starting portfolio value vs the
ending portfolio value, based on what years you want to count I come up with:
CAGR 12 years - 19.79%
CAGR 13 years - 18.14%"
On its face, yes, this is true. Just think what numbers could be put up if $1000 or $2000 a month were added to this portfolio.
Growth rate when adding funds, and returns are two different things.
So I open an account with $5000, and don't invest in anything. A year later, I add another $5000, and
holy cow, I have a 100% CAGR.
etfreplay.com using SPY, set to Custom period, 12/31/2009 to 12/31/2021 shows the annual return was 15.1%.
Here are the numbers for this portfolio from the post:
End 2009 $42,205
End 2021 $368,625.48
If you want the return correctly, you have to have the right calculator: moneychimp.com
Starting value $42,205, annual addition $6000, years to grow 12, interest rate ( market return ) 15.1% = $429,699. Not simply
investing in SPY has so far cost $61,074 and the dividends that could be bought with that extra money.
Change the return rate to 13.37% and you get $368,729. There you go.
So this portfolio has trailed the market by 1.73% annually with real figures.
There was actually more money than $500 a month put into this account, but I am not going to go into that. |
