How Long Will it take to RETIRE on SHARES

The formula I use is:
Wealth / income is directly proportional to -
Time x compound rate x savings rate.

Just trying to keep it simple. The hardest thing is understanding how much is enough.

 

Huh??

Please explain...as the redhead would say...

 

Love the quote!!!
I will try to explain how my mind works - this is just my take on behavioural finance.
The key parameters I can have an impact on in creating wealth or passive income are:
- The length of time I allow investments to compound. The younger you start the more time you would normally have. As I seriously started invested in shares at 50 years old my time is limited, by, well the limit of my life.
- The compound rate I choose to invest with, is really a choice based on the most likely best relatively safe returns (e.g. shares or property or debt securities or something else)
- Savings rate, how much I can throw at the investments each and every month.

At my age I have a limited timeframe, my compound rate is bound to my investment choice (diversified shares), my savings rate is really up to how little I can spend on my lifestyle without adverse impacts.

It turns out I can still really have a good life in my 50's and save over 50% of my salary. Go figure!

The equation just works in my brain. Time is now fixed, I have chosen my compound rate (diversified shares), so the only thing for me to focus on is improving the savings rate without impacting on lifestyle.

I have tried with some success conveying this to younger family members. My son is saving and investing and also one nephew. Time, will do the load of work for them.

Sorry for the ramble, I hope this explains my take on investment simplicity:
W = T x C x S.

Must say reading the LIC forum from start to finish really aided in an understanding of increasing the compound rate in a measured way. I do love long term graphs.

 

Double huh? Can you explain using some numbers pleeze?

 

I’d also like an example on this please!

 

, that must have been a challenge.

 

You're just not dedicated enough @Nodrog ...oh wait, I think your knowledge has contributed at least 20% of the posts

 

Volume wise probably closer to 80% at times. I tend to be more about quantity rather than quality.

Have you read all the previous LICs threads split by date as well? Combined they must be getting increasingly toward 1000 pages.

 

Back in Feb/Mar I went back and read a whole heap of them, but certainly not all. At the end of the day, it was the banter that was timeless (that and @SatayKing talking down AUI - somethings never change)

 

Yep a master in the art of deception. Definitely not one to be trusted.

 

Wealth = Time x Compounding rate x Savings

 

LOL. And that’s only the short form Summary Edition.

 

Thanks Redwing. I was thinking of putting up one of the Thornhill charts. This one does nicely.

 

I thought it was a lot of fun

 

Bump
So when you get a low ball..... corona... ?? Still ok?? Long term investors pipe in please

 

Why wouldn't it still be ok?

 

Future market point to another 2% drop Monday
then comes the margin call I live for this bargain hunting
this is game number 3 in the last 12 years

 

As of today, our shares portfolio has returned 15.14% over the last 12 months.

Over the last 118+ years, the ASX has returned an average of 13.1% per annum.

So, the last year (including the last week) has been above the long-term average.