• About us
    • Who we are
    • Mission
  • Contacts
  • English
    • Português (Portuguese (Portugal))
    • Español (Spanish)
    • Français (French)
  • Login
  • Register
Investorpolis
Advertisement
  • Home
  • Investing Series Guide
    • All
    • I. Goal Based Investing
    • II. Compounding & Inflation
    • III. Assets Risks & Returns
    • IV. Efficient Diversification
    • IX. Sustainable Investing and ESG
    • V. The Investor
    • VI. Assets and Investments
    • VII. Index Funds
    • VIII. Successful Investing
    • XI. Other Topics
    Choosing Mutual Funds Series: Part 7 – The Largest Fund Management Companies

    Choosing Mutual Funds Series: Part 7 – The Largest Fund Management Companies

    Maximizing the time invested in the stock market instead of choosing the times to invest: Part 3 – The market cycles and the mean reversion

    Maximizing the time invested in the stock market instead of choosing the times to invest: Part 3 – The market cycles and the mean reversion

    Choose P4 Mutual funds series – Evaluate and use the benchmarks and ratings of funds

    Choose P4 Mutual funds series – Evaluate and use the benchmarks and ratings of funds

    Simple Portfolios (DIY) Series Part 3: The traditional 60/40 Portfolio, the pros and cons, and how to execute it

    Simple Portfolios (DIY) Series Part 3: The traditional 60/40 Portfolio, the pros and cons, and how to execute it

    Investing in Secular Stocks Series: Part 4.1 – The 3 Valuation Methods and Fundamental Analysis

    Investing in Secular Stocks Series: Part 4.1 – The 3 Valuation Methods and Fundamental Analysis

    Simple Portfolio Series (DIY) Part 2: The Traditional Portfolio 60/40, what it is, for whom, and its performance

    Simple Portfolio Series (DIY) Part 2: The Traditional Portfolio 60/40, what it is, for whom, and its performance

    Trending Tags

      • I. Goal Based Investing
      • II. Compounding & Inflation
      • III. Assets Risks & Returns
      • IV. Efficient Diversification
      • V. The Investor
      • VI. Assets and Investments
      • VIII. Successful Investing
      • IX. Sustainable Investing and ESG
      • X. Kits and Tips
      • XI. Other Topics
    • Wealth and Investing
      • All
      • Investing
      • Wealth
      Insurance Series: Part 2.1 – Life insurance: Description and characteristics

      Insurance Series: Part 2.1 – Life insurance: Description and characteristics

      Maximizing the time invested in the stock market instead of choosing the time to invest: Part 2.2 – Stock cycles and reversion to the mean

      Maximizing the time invested in the stock market instead of choosing the time to invest: Part 2.2 – Stock cycles and reversion to the mean

      Series How Women Invest: Part 3 – The 5 investment gaps and the retirement problem

      Series How Women Invest: Part 3 – The 5 investment gaps and the retirement problem

      2Q23 Financial Markets Outlook: Markets and the economy are at a crossroads, after some recovery, and risks from past excesses continue to emerge

      2Q23 Financial Markets Outlook: Markets and the economy are at a crossroads, after some recovery, and risks from past excesses continue to emerge

      The world’s best investors use different strategies, but they have in common the patience of a long-term perspective.

      The world’s best investors use different strategies, but they have in common the patience of a long-term perspective.

      The assets allocation in the world reflects the countries economic development and their financial system

      The assets allocation in the world reflects the countries economic development and their financial system

      Trending Tags

        • Investing
        • Wealth
      • Retirement & Savings
        • All
        • Retirement
        • Savings
        Retirement Series #3: Choice of asset allocation. Part 2 – The allocations preferred by experts and investors

        Retirement Series #3: Choice of asset allocation. Part 2 – The allocations preferred by experts and investors

        Retirement Series #3: Choice of asset allocation. Part 1 – The effect on accumulated capital

        Retirement Series #3: Choice of asset allocation. Part 1 – The effect on accumulated capital

        Retirement Series: How much money do we need to live through retirement?

        Retirement Series: How much money do we need to live through retirement?

        Retirement Series: Part 1 – Overview – A backwards view

        Retirement Series: Part 1 – Overview – A backwards view

        How many years do our public or social pensions last?

        What is the replacement rate of retirement pensions?

        Trending Tags

          • Retirement
          • Savings
        • Tools
          • All
          • Calculators
          • Publications
          • Sites and apps
          Morningstar Rating for Funds

          Morningstar Rating for Funds

          Morningstar’s European Active/Passive Barometer

          Morningstar’s European Active/Passive Barometer

          Morningstar’s U.S. Active vs. Passive Barometer

          Morningstar’s U.S. Active vs. Passive Barometer

          The Power of Dividends: Past, Present, and Future, Hartford Funds, 2021

          The Power of Dividends: Past, Present, and Future, Hartford Funds, 2021

          OECD Corporate Governance Factbook 2021

          OECD Corporate Governance Factbook 2021

          G20/OECD Principles of Corporate Governance, 2015

          G20/OECD Principles of Corporate Governance, 2015

          Trending Tags

          • calculators
          • Calculators
          • Publications
          • Sites and apps
        • More
          • All
          • Best of
          Best Of Mutual Funds Series: Dividend Stocks for Investors Outside the U.S.

          Best Of Mutual Funds Series: Dividend Stocks for Investors Outside the U.S.

          Best Of Mutual Funds Series: Dividend Stocks for U.S. Investors

          Best Of Mutual Funds Series: Dividend Stocks for U.S. Investors

          Best Of Mutual Funds Series: Investment Grade Bonds, Indexed, for Eurozone Investors

          Best Of Mutual Funds Series: Investment Grade Bonds, Indexed, for Eurozone Investors

          Best Of Mutual Funds Series: US Bonds, Indexed, for US Investors

          Best Of Mutual Funds Series: US Bonds, Indexed, for US Investors

          Best Of Mutual Funds Series: Passive, US Large Stocks, for Non-US Investors

          Best Of Mutual Funds Series: Passive, US Large Stocks, for Non-US Investors

          Best Of Mutual Funds Series: Passive Large US Stocks for US Investors

          Best Of Mutual Funds Series: Passive Large US Stocks for US Investors

          Trending Tags

            • Best of
            • Reviews
            • Snapshots
            • Others
          No Result
          View All Result
          • Home
          • Investing Series Guide
            • All
            • I. Goal Based Investing
            • II. Compounding & Inflation
            • III. Assets Risks & Returns
            • IV. Efficient Diversification
            • IX. Sustainable Investing and ESG
            • V. The Investor
            • VI. Assets and Investments
            • VII. Index Funds
            • VIII. Successful Investing
            • XI. Other Topics
            Choosing Mutual Funds Series: Part 7 – The Largest Fund Management Companies

            Choosing Mutual Funds Series: Part 7 – The Largest Fund Management Companies

            Maximizing the time invested in the stock market instead of choosing the times to invest: Part 3 – The market cycles and the mean reversion

            Maximizing the time invested in the stock market instead of choosing the times to invest: Part 3 – The market cycles and the mean reversion

            Choose P4 Mutual funds series – Evaluate and use the benchmarks and ratings of funds

            Choose P4 Mutual funds series – Evaluate and use the benchmarks and ratings of funds

            Simple Portfolios (DIY) Series Part 3: The traditional 60/40 Portfolio, the pros and cons, and how to execute it

            Simple Portfolios (DIY) Series Part 3: The traditional 60/40 Portfolio, the pros and cons, and how to execute it

            Investing in Secular Stocks Series: Part 4.1 – The 3 Valuation Methods and Fundamental Analysis

            Investing in Secular Stocks Series: Part 4.1 – The 3 Valuation Methods and Fundamental Analysis

            Simple Portfolio Series (DIY) Part 2: The Traditional Portfolio 60/40, what it is, for whom, and its performance

            Simple Portfolio Series (DIY) Part 2: The Traditional Portfolio 60/40, what it is, for whom, and its performance

            Trending Tags

              • I. Goal Based Investing
              • II. Compounding & Inflation
              • III. Assets Risks & Returns
              • IV. Efficient Diversification
              • V. The Investor
              • VI. Assets and Investments
              • VIII. Successful Investing
              • IX. Sustainable Investing and ESG
              • X. Kits and Tips
              • XI. Other Topics
            • Wealth and Investing
              • All
              • Investing
              • Wealth
              Insurance Series: Part 2.1 – Life insurance: Description and characteristics

              Insurance Series: Part 2.1 – Life insurance: Description and characteristics

              Maximizing the time invested in the stock market instead of choosing the time to invest: Part 2.2 – Stock cycles and reversion to the mean

              Maximizing the time invested in the stock market instead of choosing the time to invest: Part 2.2 – Stock cycles and reversion to the mean

              Series How Women Invest: Part 3 – The 5 investment gaps and the retirement problem

              Series How Women Invest: Part 3 – The 5 investment gaps and the retirement problem

              2Q23 Financial Markets Outlook: Markets and the economy are at a crossroads, after some recovery, and risks from past excesses continue to emerge

              2Q23 Financial Markets Outlook: Markets and the economy are at a crossroads, after some recovery, and risks from past excesses continue to emerge

              The world’s best investors use different strategies, but they have in common the patience of a long-term perspective.

              The world’s best investors use different strategies, but they have in common the patience of a long-term perspective.

              The assets allocation in the world reflects the countries economic development and their financial system

              The assets allocation in the world reflects the countries economic development and their financial system

              Trending Tags

                • Investing
                • Wealth
              • Retirement & Savings
                • All
                • Retirement
                • Savings
                Retirement Series #3: Choice of asset allocation. Part 2 – The allocations preferred by experts and investors

                Retirement Series #3: Choice of asset allocation. Part 2 – The allocations preferred by experts and investors

                Retirement Series #3: Choice of asset allocation. Part 1 – The effect on accumulated capital

                Retirement Series #3: Choice of asset allocation. Part 1 – The effect on accumulated capital

                Retirement Series: How much money do we need to live through retirement?

                Retirement Series: How much money do we need to live through retirement?

                Retirement Series: Part 1 – Overview – A backwards view

                Retirement Series: Part 1 – Overview – A backwards view

                How many years do our public or social pensions last?

                What is the replacement rate of retirement pensions?

                Trending Tags

                  • Retirement
                  • Savings
                • Tools
                  • All
                  • Calculators
                  • Publications
                  • Sites and apps
                  Morningstar Rating for Funds

                  Morningstar Rating for Funds

                  Morningstar’s European Active/Passive Barometer

                  Morningstar’s European Active/Passive Barometer

                  Morningstar’s U.S. Active vs. Passive Barometer

                  Morningstar’s U.S. Active vs. Passive Barometer

                  The Power of Dividends: Past, Present, and Future, Hartford Funds, 2021

                  The Power of Dividends: Past, Present, and Future, Hartford Funds, 2021

                  OECD Corporate Governance Factbook 2021

                  OECD Corporate Governance Factbook 2021

                  G20/OECD Principles of Corporate Governance, 2015

                  G20/OECD Principles of Corporate Governance, 2015

                  Trending Tags

                  • calculators
                  • Calculators
                  • Publications
                  • Sites and apps
                • More
                  • All
                  • Best of
                  Best Of Mutual Funds Series: Dividend Stocks for Investors Outside the U.S.

                  Best Of Mutual Funds Series: Dividend Stocks for Investors Outside the U.S.

                  Best Of Mutual Funds Series: Dividend Stocks for U.S. Investors

                  Best Of Mutual Funds Series: Dividend Stocks for U.S. Investors

                  Best Of Mutual Funds Series: Investment Grade Bonds, Indexed, for Eurozone Investors

                  Best Of Mutual Funds Series: Investment Grade Bonds, Indexed, for Eurozone Investors

                  Best Of Mutual Funds Series: US Bonds, Indexed, for US Investors

                  Best Of Mutual Funds Series: US Bonds, Indexed, for US Investors

                  Best Of Mutual Funds Series: Passive, US Large Stocks, for Non-US Investors

                  Best Of Mutual Funds Series: Passive, US Large Stocks, for Non-US Investors

                  Best Of Mutual Funds Series: Passive Large US Stocks for US Investors

                  Best Of Mutual Funds Series: Passive Large US Stocks for US Investors

                  Trending Tags

                    • Best of
                    • Reviews
                    • Snapshots
                    • Others
                  No Result
                  View All Result
                  Investorpolis
                  No Result
                  View All Result
                  Home Wealth and Investing Investing

                  We can also have 7 or 9 times better financial life (or up to 18 times better)

                  1 de December, 2019
                  in Investing, Wealth and Investing
                  Reading Time: 5 mins read
                  0 0
                  0
                  Share on FacebookShare on Twitter

                  Cats having 7 to 9 lives is a myth; we managed to earn these same lives, but without myths

                  Making investments at 8% per year instead of investments in deposits, savings or money market accounts at 1% per year in the long term

                  8% per year (or up to 10% per year) is not even too much in medium and long-term investments!

                  Cats having 7 to 9 lives is a myth; we managed to earn these same lives, but without myths

                  Without knowledge of the origin of the phrase, this expression appeared by the ability of cats to escape situations of extreme difficulty. As they fell from great heights and hit the ground on the four legs, they created a magical image around them.

                  About 5,000 years ago, in ancient Egypt, in the times of the pharaohs, these felines were worshipped as deities. The Egyptian goddess Bastet, a symbol of maternal love, tenderness and fecundity, was depicted with a woman’s body and cathead. The Egyptians believed in Eneade, a group formed by 9 deities. It was from there that the legend that cats were protected by the 9 Egyptian gods and that, with every lost life, reincarnated another of the 9 gods of Eneade.

                  There are also those who attribute to the Chinese the origin of the 9 lives of cats. Number 9 is considered a lucky number in China.

                  Muhammad had a great worship for felines and for that reason he quoted them several times in his proverbs, as well as their seven lives.

                  In the middle ages, cats had seven lives and were directly linked to witches and their power of evil and black magic, to the point that they were the object of persecution by the Inquisition.

                  The numbers, 7 or 9, change depending on the cultures, as their meanings also vary. But luck, success, fertility and longevity are usually linked to these numbers.

                  What do cat lives have to do with our financial life. Much because we too can live 7, 9 or even more better lives. How can we do that?  

                  Making investments at 8% per year instead of investments in deposits, savings or money market accounts at 1% per year in the long term

                  We can live 7, 9 or even 18 times better if we better decide the fates of our money. How?

                  Investing our savings in financial assets instead of placing them in deposits, savings accounts or the money market, on the medium and long-term.

                  The following graph shows how this is possible by investing in financial assets €30 euros per week at an average annual rate of 8% compared to the placement of the same €30 euros per week in time deposits, savings account or money market funds:

                  We have taken as an example the placement of €30 euros per week simply because it seems to us a perfectly achievable value within many, but the conclusion is the same for whatever amount used.

                  The following table details the amounts accumulated by the various types of placements, highlighting the situations of monetary application at 1% per year versus an investment of 8% per year:

                  Savings of €30 per week are €15,600 per decade and €78,000 over 50 years.

                  The placement in time deposits, savings or money market accounts at an average rate of 1% per year would provide an appreciation of capital from €78,000 to €101,064 for 50 years. We can also see what would happen on other time periods. For example, the application for 30 years would result in an increase in accumulated savings from €46,800 to €54,535.

                  Investment at an average annual rate of return of 8% would result in capital growth from €78,000 to €930,196 in 50 years. For the 30-year period, savings of €46,800 would have become a capital of €183,655.  

                  In the following table we split the capital accumulated by the various types of investments and those resulting from the placing in money market accounts at 1% per year:

                  This ratio shows the multiples of net worth creation or wealth building provided by each of the investments versus the scenario taken as the basis, of the placement at 1% per year.

                  Thus, it is concluded that if we invest with an average annual rate of return of 8% per year, we accumulate 9.2 times the capital we obtain in the placement at 1% per year. We can say we live 8.2 times better. If we manage to get a rate of return of 10% per year, the multiple would be 18.8, so we would live 17.8 times better.

                  We can achieve this money by making savings between the age of 20 and 70. This allows us to enjoy a much quieter and richer retirement live and provide our children, grandchildren, great-grandchildren or other family, friends or those who we wish, a better life.

                  8% per year (or up to 10% per year) is not even too much long-term investments!

                  But isn’t 8% a year too much? Isn’t it an unattainable average annual rate of return?

                  No, not at all. As we can see in the following chart the average annual rate of return of investment in shares of large U.S. companies was 10.2% per year and investment in small and medium-sized companies was up to a much higher, 12.1% per year, in the period 1926 to date.

                  And isn’t investing everything in stocks too risky? Shouldn’t we diversify and make also investments in bonds? Not once again, no, at all. In a long-term investment, as the present case, the advisable allocation is 100% in shares.

                  The following chart shows the distribution of the rates of return of investment in shares and bonds as a percentage, from 1926 to 2015 in the US.

                  For investment periods equal to or longer than 30 years, in 99% of cases the profitability of investment in shares was higher than that of bonds. 99%!

                  So, it’s not worth investing a penny that’s in bonds. What we should do is invest 100% of the capital in stocks, but in a diversified way. For example, investing in investment products indexed to markets, the S&P 500 (of the 500 largest US companies) or the Russell 2000 (of the 2000 largest small and medium-sized companies). We can also invest in products indexed to MSCI World (about 1,600 largest companies in the world) or Eurostoxx 50 (50 largest European companies).

                  Previous Post

                  Savings accounts don’t earn enough and don’t take us far

                  Next Post

                  Invest as Warren Buffett in big and everlasting consumer companies

                  Investadmin

                  Investadmin

                  Related Posts

                  Insurance Series: Part 2.1 – Life insurance: Description and characteristics
                  Wealth

                  Insurance Series: Part 2.1 – Life insurance: Description and characteristics

                  25 de May, 2023
                  Maximizing the time invested in the stock market instead of choosing the time to invest: Part 2.2 – Stock cycles and reversion to the mean
                  Investing

                  Maximizing the time invested in the stock market instead of choosing the time to invest: Part 2.2 – Stock cycles and reversion to the mean

                  15 de May, 2023
                  Series How Women Invest: Part 3 – The 5 investment gaps and the retirement problem
                  Investing

                  Series How Women Invest: Part 3 – The 5 investment gaps and the retirement problem

                  8 de May, 2023
                  2Q23 Financial Markets Outlook: Markets and the economy are at a crossroads, after some recovery, and risks from past excesses continue to emerge
                  Investing

                  2Q23 Financial Markets Outlook: Markets and the economy are at a crossroads, after some recovery, and risks from past excesses continue to emerge

                  9 de April, 2023
                  The world’s best investors use different strategies, but they have in common the patience of a long-term perspective.
                  Investing

                  The world’s best investors use different strategies, but they have in common the patience of a long-term perspective.

                  23 de March, 2023
                  The assets allocation in the world reflects the countries economic development and their financial system
                  Investing

                  The assets allocation in the world reflects the countries economic development and their financial system

                  23 de March, 2023
                  Next Post

                  Invest as Warren Buffett in big and everlasting consumer companies

                  Leave a Reply

                  Your email address will not be published. Required fields are marked *

                  Trending

                  Insurance Series: Part 2.1 – Life insurance: Description and characteristics

                  Insurance Series: Part 2.1 – Life insurance: Description and characteristics

                  25 de May, 2023
                  Choosing Mutual Funds Series: Part 7 – The Largest Fund Management Companies

                  Choosing Mutual Funds Series: Part 7 – The Largest Fund Management Companies

                  22 de May, 2023
                  Maximizing the time invested in the stock market instead of choosing the time to invest: Part 2.2 – Stock cycles and reversion to the mean

                  Maximizing the time invested in the stock market instead of choosing the time to invest: Part 2.2 – Stock cycles and reversion to the mean

                  15 de May, 2023
                  Series How Women Invest: Part 3 – The 5 investment gaps and the retirement problem

                  Series How Women Invest: Part 3 – The 5 investment gaps and the retirement problem

                  8 de May, 2023
                  Investorpolis

                  We developed this blog because we believe that only a small learning effort is needed to make a big change in the decisions and results of our investments and financial assets.

                  Main categories

                  • Investing Series Guide
                  • Wealth and Investing
                  • Retirement & Savings
                  • Tools
                  • More

                  Newsletter

                  Sign to our mailing list to receive updates direct to your inbox!

                  *We don’t spam

                  • Privacy Policy
                  • Cookie Policy
                  • Contacts

                  © 2021 - Investorpolis / Powered by Delta Soluções

                  • pt-pt Português
                  • fr Français
                  • es Español
                  • en English
                  • Home
                  • Investing Series Guide
                    • I. Goal Based Investing
                    • II. Compounding & Inflation
                    • III. Assets Risks & Returns
                    • IV. Efficient Diversification
                    • IX. Sustainable Investing and ESG
                    • V. The Investor
                    • VI. Assets and Investments
                    • VII. Index Funds
                    • VIII. Successful Investing
                    • X. Kits and Tips
                    • XI. Other Topics
                  • Retirement & Savings
                    • Retirement
                    • Savings
                  • Wealth and Investing
                    • Investing
                    • Wealth
                  • Tools
                    • Calculators
                    • Publications
                    • Sites and apps
                  • More
                    • Best of
                    • Reviews
                    • Snapshots
                    • Others
                  • About us
                    • Who we are
                    • Mission
                  • Login
                  • Sign Up
                  • Cart

                  © 2021 - Investorpolis / Powered by Delta Soluções

                  Welcome Back!

                  Login to your account below

                  Forgotten Password? Sign Up

                  Create New Account!

                  Fill the forms bellow to register

                  All fields are required. Log In

                  Retrieve your password

                  Please enter your username or email address to reset your password.

                  Log In
                  We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
                  Cookie configurationCookie PolicyAcceptReject
                  Manage consent

                  Privacy Overview

                  This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
                  Advertisement
                  Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
                  Analytics
                  Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
                  Functional
                  Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
                  Necessary
                  Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
                  Others
                  Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
                  Performance
                  Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
                  SAVE & ACCEPT

                  Add New Playlist

                  Are you sure want to unlock this post?
                  Unlock left : 0
                  Are you sure want to cancel subscription?