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Posted: 6/8/2016 12:36:01 PM EDT
I original posted this in GD and got a bunch of stupid responses so I thought I would try here. Its a serious question despite the funny subject title.

I changed jobs and had to start a new 401k and have been playing with financial calculators and the concept of compounding interest and was thinking if only I could invent a time machine to go back 100 years and invest a few thousand dollars (present worth) how insanely wealthy I would be.
Obviously that’s not possible. But that made me think, what if one of my grandparents had been wise enough or generous enough to invest just one single paycheck and put it in the market with intention of passing it on to their grandchildren when they reached retirement age (approx. 100 years) I could be sitting on millions of dollars.

I don’t have kids yet but hope to soon and it’s crazy how a small sacrifice now could change the whole legacy of my family. Has anyone ever thought about doing this?
Is this a smart ideal for building generational wealth or are there better ideas out there?
If it were this easy I feel like everyone would have done it, but then again most people live pay check to pay check and are more worried about who got voted off the last episode of the latest reality show.

FWIW: $1,000 @ 8% over 100 years becomes roughly $2,000,000
If you assume 3% inflation, you’re still looking at $1.2 million
Link Posted: 6/8/2016 9:53:13 PM EDT
Great thought process, but honestly most people are to focused in the now. I'm 22 and trying to put away 15K a year into Roth 401K and Roth IRA's in between my wife and I. My friends look at me like Im an idiot. Unfortunately being financially responsible isn't cool.
Link Posted: 6/8/2016 10:04:05 PM EDT
I kick myself for not starting my savings in my 20s. I burned money like water from about age 23-30. Had a lot of fun...but what a waste.

I sometimes cringe at the lost opportunities that I could have had if I were putting the max into IRAs from then to now.

My advice to anyone with a job...sacrifice whatever you need to in order to max an IRA every year for every penny you can. Add a brokerage acct and even if you just put money into some basid ETFs...over time, huge gains.

Link Posted: 6/8/2016 10:16:09 PM EDT
Just think what you could have if you could invest your SS taxes in a broad based index fund for your working years and beyond.
Link Posted: 6/9/2016 9:07:32 AM EDT
What most people miss out on is the concept that when they start drawing from their 401K, the amount in that account that was contributed by the individual is often dwarfed by the amount from the earnings generated by the market.

All the liberals that are boohooing on "big business" being profitable miss that concept also. Even those with a pension, the retirement plans just do not work without a healthy market of profitable corporations.
They are the classic example of the "give it to me now!" without paying attention to what it affects later.

Done. There. That is your economics lesson for the day.
Link Posted: 6/9/2016 10:49:53 AM EDT
[Last Edit: 6/9/2016 10:50:17 AM EDT by therealdonjohnson]
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Originally Posted By FedDC:
I kick myself for not starting my savings in my 20s. I burned money like water from about age 23-30. Had a lot of fun...but what a waste.

I sometimes cringe at the lost opportunities that I could have had if I were putting the max into IRAs from then to now.

My advice to anyone with a job...sacrifice whatever you need to in order to max an IRA every year for every penny you can. Add a brokerage acct and even if you just put money into some basid ETFs...over time, huge gains.

View Quote
This.

Opened a Roth in Feb when the market was down, at the ripe age of 25. I was able to put contributions away for '15 and '16 and I have '17 contributions on deck.

Working in the industry I realized how valuable time is. Cant make that shit back!

ETA: In before midcaps double windsor
Link Posted: 6/9/2016 11:20:53 PM EDT
My stepsister is 29, doesn't work, has a kid, and over $200k in debt at about 7% interest. The OP's calculations really underscored how screwed she is.
Link Posted: 6/10/2016 12:02:46 AM EDT
You could invest $1000 right now and it might do 8% again in the next 100 years.

Looking back though, there are a few interesting things to consider

-There were no index funds in 1916. The only choices were individual stocks, which can be quite risky. Here are some stocks from the DOW in 1916, although most didn't fail catastrophically. AT&T in particular is really healthy today.

American Beet Sugar, American Can, American Locomotive, AT&T, Baldwin Locomotive, Goodrich, Republic Iron, Studebaker, Texas Company, Utah Copper, Western Union, Westinghouse Electric

-There were plenty of reasons to be afraid from the beginning. The market was actually closed right after WWI started. From the beginning of 1916 to the end of 1920 the market had dropped 50%. Then afterwards there was the Great Depression, World War 2, and the Cold War. Certainly a lot to worry about!

-Purchasing stocks was more difficult. I'm not sure how it worked exactly but I think you had to go in person to a brokerage with cash.

Link Posted: 6/10/2016 8:09:34 PM EDT
-Purchasing stocks was more difficult. I'm not sure how it worked exactly but I think you had to go in person to a brokerage with cash.
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It wasn't that primitive. You could write a check to fund your investments, and phone your instructions to your broker.

And, it didn't take as much cash as today. You could buy stocks on 10% margin.

But, it was basically a rich man's activity, with a few exceptions. Not like today.
Link Posted: 6/10/2016 8:15:13 PM EDT
The market was actually closed right after WWI started.
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The exchanges were closed, but people traded in the streets, (or maybe on the sidewalk). Newspapers reported these trades.

Notice that exchanges were not closed in WWII. Roosevelt had learned something from Wilson's mistakes.

Link Posted: 6/11/2016 11:18:45 AM EDT
[Last Edit: 6/11/2016 11:19:18 AM EDT by Wolfpack]
Link Posted: 6/12/2016 2:09:09 PM EDT
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Originally Posted By Wolfpack:
I started investing in my 30's and I'm 47 now. It's the reason I started my 15mo old in the market when he was just a couple months old. He has positions in CAT, BA and BRK.B before he was even 1yo.
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Those are all fine equities but I'd advise the young lad to eliminate individual stock risk and market sector risk by investing in a low cost, total stock market passive index fund.
Link Posted: 6/14/2016 8:43:38 AM EDT
Anyone does this yet? I don't know if there is a way to open something for a person who isn't alive yet without all the tax implications of a gift?

Any thoughts?

This has me greatly interested as I would like to start saving for my children's college/retirement, but none are born yet.
Link Posted: 6/14/2016 8:58:37 AM EDT
Link Posted: 6/14/2016 10:02:39 AM EDT
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Originally Posted By Wolfpack:


You can't open a bank or brokerage account until they have a SS#.....

Posted Via AR15.Com Mobile
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Originally Posted By Wolfpack:
Originally Posted By nikfleisch:
Anyone does this yet? I don't know if there is a way to open something for a person who isn't alive yet without all the tax implications of a gift?

Any thoughts?

This has me greatly interested as I would like to start saving for my children's college/retirement, but none are born yet.


You can't open a bank or brokerage account until they have a SS#.....

Posted Via AR15.Com Mobile

That's what I thought, so this thread's idea isn't possible.
Link Posted: 6/22/2016 1:14:30 PM EDT
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Originally Posted By nikfleisch:

That's what I thought, so this thread's idea isn't possible.
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Discussion ForumsJump to Quoted PostQuote History
Originally Posted By nikfleisch:
Originally Posted By Wolfpack:
Originally Posted By nikfleisch:
Anyone does this yet? I don't know if there is a way to open something for a person who isn't alive yet without all the tax implications of a gift?

Any thoughts?

This has me greatly interested as I would like to start saving for my children's college/retirement, but none are born yet.


You can't open a bank or brokerage account until they have a SS#.....

Posted Via AR15.Com Mobile

That's what I thought, so this thread's idea isn't possible.


You don't necessarily have to open an account in their name. You can have the funds in your name and in your will/trust have it setup to be distributed evening among your heirs upon your death. And you can set conditions like your kids and grand klids cant access the money until they are 65 years old, that way they don't blow it on stupid stuff when they are young, instead they receive the money when they are older and more wise with money. You can also talk with your kid and layout your intentions for the money, IE for it to be reinvested for future generations. Sure they may just take the cash and blow it on a coke fueled trip around the world but hopefully if youre kids are completed screw ups they will follow your wishes. And if they seem that terrible I would just change my wlll and have it donated to a charity of my choice.
Link Posted: 6/22/2016 4:26:55 PM EDT
[Last Edit: 6/22/2016 4:27:27 PM EDT by midcap]
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Originally Posted By therealdonjohnson:
This.

Opened a Roth in Feb when the market was down, at the ripe age of 25. I was able to put contributions away for '15 and '16 and I have '17 contributions on deck.


Working in the industry I realized how valuable time is. Cant make that shit back!


ETA: In before midcaps double windsor
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Originally Posted By therealdonjohnson:
Originally Posted By FedDC:
I kick myself for not starting my savings in my 20s. I burned money like water from about age 23-30. Had a lot of fun...but what a waste.

I sometimes cringe at the lost opportunities that I could have had if I were putting the max into IRAs from then to now.

My advice to anyone with a job...sacrifice whatever you need to in order to max an IRA every year for every penny you can. Add a brokerage acct and even if you just put money into some basid ETFs...over time, huge gains.

This.

Opened a Roth in Feb when the market was down, at the ripe age of 25. I was able to put contributions away for '15 and '16 and I have '17 contributions on deck.


Working in the industry I realized how valuable time is. Cant make that shit back!


ETA: In before midcaps double windsor


You see when you are good enough to wear a double Windsor you make money on the way up and on the way down

Dorito knot 4 life !
Link Posted: 6/23/2016 12:19:55 AM EDT
Read 100 Baggers by Cris Mayer! Good Luck! Long live sitting on your hands & HD !
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