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this post was submitted on 13 Oct 2024
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Asklemmy
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So if the investment is for inflation, what are you going to survive from?
Historically, investing in a broad-market index fund has seen 8-12% annual returns. Average inflation in the US has been around 2-3%. Subtract another 3-4% for taxes, and you're still making at least 3%.
Anyways, the point is more about the fact how powerful saving & compounding is. Save early in life, and try to not inflate your lifestyle too much, and then you can technically reach financial independence.
If you can set aside 50 % of your money, you are already independent.
I was able to do that for a few years bit I was living with my parents and paying them a pittance for rent. Certainly not independent. All my expenses shot up when I left but I was able to pay a lot of my loans off before that.