Financial Question

Posted: 8/5/2005 9:39:31 AM EDT

What would an average growth rate be since the year 1950? I'm not interested in inflation calculations, ect. (as, I've been able to find that info), but more so in what a good return rate would have been had the money been wisely invested. (As I've been told it was.) I'd like to figure out how much a sum of money may have grown into in the last 55 years. Thanks much.

Posted: 8/5/2005 10:07:51 AM EDT

[#1]

Assuming (or perhaps knowing) that returns on investments have not been the same through the 1950's, 1960's, 1970's etc., I guess I can phrase my question a bit better by asking what an average return rate would have been for the five decades up until the present?

Posted: 8/5/2005 10:08:53 AM EDT

[#2]

return rate on what? Stocks, savings, real estate, pork bellies?

Posted: 8/5/2005 10:09:14 AM EDT

[#3]

IBTM.

Posted: 8/5/2005 10:13:52 AM EDT

[#4]

Edit - Sorry gave price escalation conversions.

Try http://www.finfacts.com/stockperf.htm

Posted: 8/5/2005 10:15:11 AM EDT

[#5]

Stock market has averaged 11.8% for the past 70 years.

Posted: 8/5/2005 10:17:13 AM EDT

[#6]

Quoted:
return rate on what? Stocks, savings, real estate, pork bellies?

And it would appear I overlooked the most important thing in my asking. . .specifically, returns in the stock market. I don't discuss much financial info with the person I'm trying to figure this out about, I'm simply curious as to the extreme wealth he/she appears to have.

Posted: 8/5/2005 10:18:12 AM EDT

[#7]

Thanks Forty5 and MrClean4Hire. Checking out the link right now.

Edited to add that I'll have to access the links info some other time. The computer I'm on only has Mozilla Firefox and it won't work. (It says so on the top of the page, and sure enough, it doesn't work.)

Posted: 8/5/2005 10:33:35 AM EDT

[#8]

You should be able to double your money every ten years.

Posted: 8/5/2005 10:48:52 AM EDT

[#9]

Some rules of thumb for long-term planning:

Small stocks: 11-12%
Large stocks: 9-10%
Bonds: 5-6%

For comparison:
Inflation: 5-6%
Wage growth: 3-4%

While the stock market has returned an average of about 11% over the long-term, one would not be wise to invest his entire nest egg exclusively in stocks. So if you're trying to come up with a kind of general growth rate, I'd use about 7-8% to be conservative, which assumes that you mix stocks with bonds, cash, etc.

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