Select to expand quoteCarantoc said..
Okey-dokey, so just the maths, no opinion, and simplifed to a reasonable amount for the purposes of the exercise :
Start paying super / saving for retirement at 25, retire at 65
Average wage today : 90k per year
Pay rises over the years at 3% per annum, raised once per year
Super / retirment investment contributions made quarterly at 9% of gross pay (ignoring compulsary super raises of recent years)
Anytax on contribution does not reduce the contribution
Super / reitrement investment earns 4% annual (inclusive of all costs), interest paid quarterly
Then at retirement super account would hold $411,632
If you earnt 5% annual on the investment holdings then account would hold $513k
Sticking with the 5% interest, if you paid an additional voluntary contribution of 1% of gross pay (so about $17.31 a week at today's $90k per annum average wage, but was about $5.46 per week at 25 years old) then super account would hold $570k
To get $1m you have to either :
Additional voluntry contribution of about 10% gross pay (so equavalient of about $173 per week at today's $90k average wage, about $55/ week at 25 years of age)
or, no additional voluntary contribution and earn about double the average pay (so about $180k per annum gross todays money, about $56k when aged 25)
or no additional voluntary contribution (9% of gross pay only invested), earn average wage (90k today) and you'd have to earn 7.75% interest on your super / retirement account
Or randomly if you had no additional voluntary contribution (9% of gross pay only invested), earn average wage (90k today), but earn 6.5% interest on your super / retirement account and start off age 25 with a lump sum amount $25k (about equal to annual gross wage of $28.4k), you'd hit the $1m mark.
Or if you invest wisely and if the super makes 9.5% as Mr Milk summarised above, then you could have retired 5 years early on $1m lump sum, at 60 years old, earning at the time $77.6k per annum. If you'd have kept working to 65 you'd be on about $1.59M lum sum. And you only have had to pay in the 9% compulsary super contribution.
So, mmm, dunno I'd conclude not easy if you just do vanilla compulsary super contribution into a default fund, but not impossible if you add a bit more or earn a bit more interest or dabble in a bit of bitcoin or something. Oh sorry, no opinion.
In 2065 $1m will be a fraction of what you would need to retire. You need $1m to retire comfortably in 2024.
Using the future value calculator and an average inflation rate of 4.88% in 40 years you would need to save $ 7,014,936.50
www.calculatorsoup.com/calculators/financial/future-value-calculator.php
I understand that wages would also increase over the same period, but they lag behind inflation. Since 1998 wages have increased by an average of only 3.12%.
If you study this entire website - like I did - you will see your maths is NQR.
tradingeconomics.com/australia/wage-growth
Select to expand quotehitch_hiker said..Pcdefender said..
Is it sheepox or sheep-pox
Its D3 - so he means She-pox
You'll have to clarify here.
It seems like you're saying women are a plague?
So if inflation has averaged 4.9%, the real return on shares has been 8.1%.
Over a 40 year period the original investment has been multiplied 22 times in real terms.
Yeah, I think I stand with Mr Milk here.
I am not sure how inflation is particularly relevant to the maths part requested. I was working on needing $1m today for a person who is average wage earner and what would have been required to get there within some bounds. As said previsously I am ignoring if $1m is enough for retirement going forwards from today as that was said to be a correct amount on this 4% FIRE notion.
So I went backwards with annual wage at 3% per year, a super contribution of 9% of whatever that wage was at the time, and an average annual return on the capital in the super account of 4% / 5% / 7.75% / whatever as a variable. Which started me at a wage of something like $28k, 25 years ago.
If you did the whole thing starting on you'd need $7m in 40 years time then I am assuming maths is the same if you say wage increase 3% per annum, 9% contribution of that amount and 4%/5%/7.5% whatever return on capital. Just means you go from $90k starting wage rather than $90k finish wage.
The numbers would be different if you assumed different annual wage increase, investment return, super % contribution etc, but the actual maths formula would be the same irrespective of what inflation makes the lump sum value required at retirement.
So, I think inflation is only relevant to determine if you need $1m or $7m finshing point. And this finishing point lump sum is, as previously agreed, the starting point of the check and outside the scope of C-Toc's maths.
Should also say I am working on long term averages.
But with the interest on the capital compunding over time the difference in actual quarterly values will alter the outcome even when the long term average is the same.
But I assumed we were taking "about" numbers, not exactly $1m and 00 cents.
Select to expand quotemyscreenname said..
In 2065 $1m will be a fraction of what you would need to retire. You need $1m to retire comfortably in 2024.
Using the future value calculator and an average inflation rate of 4.88% in 40 years you would need to save $ 7,014,936.50
www.calculatorsoup.com/calculators/financial/future-value-calculator.php
I understand that wages would also increase over the same period, but they lag behind inflation. Since 1998 wages have increased by an average of only 3.12%.
If you study this entire website - like I did - you will see your maths is NQR.
Okey-Dokey.
So :
$90k starting salary increasing at 3% per annum, one rise per year
Super into an investment account at 12% of quarterly gross earnings, paid quarterly, no tax deduations / fees / expenses etc.
Interest on the account earned quarterly and re-invested into the account
Required lump sum in 40 years time is $7.014M
You would need an average return of about 9.65%, including all fees / deductions etc.
You starting wage would be $90k, with $2,700 per quarter being paid in (12% compulsary super contribution)
Your finishing wage would be $285k per year, with $8550 per quarter being paid in.
If it was the old 9% compulsary super you'd only have $5.3M lump sum
If return was 5% (at 12% super contribution) you'd only have $2.2M lump sum
If you maxed out at 13% annual return you'd have $18.4M lump sum
If it was 12% super contribution, 5% return and your wage only grew at 2% from today (so was $195k in 40 years) lump sum would be $1.85M.
Then again not many 25 year olds start work on the average wage. And not many people do the same job for 40 years on the average wage and an average wage increase.
Should probably include a lower wage at the start and a higher at the end, even if the total 40 year wage is the same, compunding interest will make a noticeable difference.
But then in Oz we also get a means tested age pension. I assume the lump sum end point ignores this ?
What was the question again ?
Select to expand quoteCarantoc said..
Then again not many 25 year olds start work on the average wage. And not many people do the same job for 40 years on the average wage and an average wage increase.
Should probably include a lower wage at the start and a higher at the end, even if the total 40 year wage is the same, compunding interest will make a noticeable difference.
But then in Oz we also get a means tested age pension. I assume the lump sum end point ignores this ?
What was the question again ?
Thanks for the peer review. I think we can assume it's doable with a fair bit of luck and many sacrifices. Especially if you also happen to own your own home outright as well. And yes government does provide a safety net for the many who will never achieve a self funded comfortable retirement by age 65.
Yeah, my conclusion was about that, may be a bit less optimistic.
On average wage you'd have to work full time, no breaks for kids or anything, start off at full steam, actively manage your super account (default only isn't going to do it), make a few sacrafices and have some luck thrown in as well.
I am not sure that the typical "average wage" retirement investments gets the consistent 13% or even 9% return Mr Milk is talking about. I'd guess they pretty well all spread investments for risk perspectives and some of those will make a negative return. The best might make those sorts of numbers, but would be hard to maintain for the average.
If you do own a home and are willing to use it in some form to fund retirement then I'd guess it makes it a bit easier.
Personally I am relying on convincing gulliable old grannies in the nursing home that Carantoc's investment advice is a good idea and they should hand over the blank cheques to fund my retirement. Maybe Carantoc and myscreenname could team up - Dirty Rotten Scoundrels style. Obviously myscreenname would be Ruprecht and Carantoc would be the sauve gentleman-ly playboy that everyone loves.
Select to expand quoteMr Milk said..
So if inflation has averaged 4.9%, the real return on shares has been 8.1%.
Over a 40 year period the original investment has been multiplied 22 times in real terms.
So does the 8.1% include reinvesting dividends? I'd like to compare house prices in capital cities which also includes rental returns. I've heard people say shares have performed better, but I'm not convinced.
Select to expand quotemyscreenname said..Mr Milk said..
So if inflation has averaged 4.9%, the real return on shares has been 8.1%.
Over a 40 year period the original investment has been multiplied 22 times in real terms.
So does the 8.1% include reinvesting dividends? I'd like to compare house prices in capital cities which also includes rental returns. I've heard people say shares have performed better, but I'm not convinced.
Why not just compare them with gold. I wasn't alive in 1960 but I hear that you could buy a house for a gold bar back then, and it's said that the same weight gold bar will buy a house in 2024. I haven't fact checked this but it sounds plausible.
Select to expand quotepsychojoe said..
Why not just compare them with gold. I wasn't alive in 1960 but I hear that you could buy a house for a gold bar back then, and it's said that the same weight gold bar will buy a house in 2024. I haven't fact checked this but it sounds plausible.
Sounds interesting. I think the gold bar would need to be bigger in 2024 than it was in 1960. I recall reading barefoot investor who said gold was not a great long term investment.
Bitcoin has only been around for 15 years. Right now you could buy an average house in Sydney for 10BTC but back in 2010, 10,000 BTC could only buy you two pizzas.
finance.yahoo.com/news/bitcoin-pizza-day-story-behind-150023085.html
Carantoc, what size gold bar would buy an average house in Sydney in 2024?
According to Max Igan in his latest podcast.......the way of Palestine will be the way of the world.
If true we live in the last days.
odysee.com/@thecrowhouse:2/Max-Igan-on-BaalBusters-with-Daniel-Kristos:3
Select to expand quoteMax Igam said..
I'm talking 1050 kids gone without a trace. They have absolutely no clue where these children are. It's like they vanished into thin air.
They've stolen between 1000 and 2000 children.
Did they ever find the missing 1,050 Maui children that were stolen after the wild fires there in August 2023?
www.bitchute.com/video/Tn9kMFUoh5RH/
Select to expand quotemyscreenname said..Mr Milk said..
So if inflation has averaged 4.9%, the real return on shares has been 8.1%.
Over a 40 year period the original investment has been multiplied 22 times in real terms.
So does the 8.1% include reinvesting dividends? I'd like to compare house prices in capital cities which also includes rental returns. I've heard people say shares have performed better, but I'm not convinced.
I assume the 13.0% is total return ie dividends + price. You said 70 years worth of inflation averages 4.9%, so 13.0 - 4.9 = 8.1%.
The chart makes it clear that most years are in the 0 _ 30% range with a few spectacular outliers. I'm a bit surprised that 2020 wasn't a negative year what with the world shutting down abruptly in March.
Select to expand quotemyscreenname said..
Carantoc, what size gold bar would buy an average house in Sydney in 2024?
Carantoc is not the suppository of all knowledge.
I believe average Sydney house price recently hit $1m ?
Gold price about $3,500 / ounce at the moment ?
So $1m / $3,500 = 285 ounces (had to use the calculator for that one, a Casio fx-100AU)
Ounces are for smounounces, so using my little convertor pop-up program thingy it is about 8kg of gold.
8kg is the typical weight capacity of many washing machines, so perhaps think of it as one week's worth of myscreenname's dirty laundry ?
Select to expand quotePcdefender said..
If true .....
If. Yeah, IF.
I haven't looked at the link because I am pre-disposed to believe it is utter bollocks.
Which, of course, is not too different to PM33 being pre-disposed to believe everything other than the link is utter bollocks. But this point doesn't matter to me because my opinion is totally the correct one.
But - on the assumption it is some crap about Israel and Palestine and some sort of notion it is "big them" against "little us" leading to the conclusion of the whole world being oppressed like the people of Palestine ....
Not sure how that computes. Palestine population 5 million. Israel population 9 million. So if you make some sort of prediction the same thing is coming to "us" then it is 35% chance you'd be oppressed and 65% you'd be the oppressor.
So, probability is that PM33 will become "one of them" without knowing it.
If he ain't already.
Select to expand quoteCarantoc said..
Carantoc is not the suppository of all knowledge.
I believe average Sydney house price recently hit $1m ?
Gold price about $3,500 / ounce at the moment ?
So $1m / $3,500 = 285 ounces (had to use the calculator for that one, a Casio fx-100AU)
Ounces are for smounounces, so using my little convertor pop-up program thingy it is about 8kg of gold.
8kg is the typical weight capacity of many washing machines, so perhaps think of it as one week's worth of myscreenname's dirty laundry ?
While your Casio fx-100AU is warmed up, can you calculate how heavy the block of gold would need to be in 1960 would have be to buy a house in Sydney for $12,000?
Please take care to factor in $US/AUD exchange rates if converting currencies.
www.domain.com.au/news/blast-from-the-past-inside-sydneys-nostalgic-period-homes-1071724/
Carantoc provides a fact check service.
You might want to try here :
www.airtasker.com/au/
Select to expand quoteCarantoc said..
Carantoc provides a fact check service.
Some random on the internet (seabreeze consilidated network) posted this and I think he/she/they could be wrong. It wouldn't be the first time.Select to expand quotepsychojoe said..
Why not just compare them with gold. I wasn't alive in 1960 but I hear that you could buy a house for a gold bar back then, and it's said that the same weight gold bar will buy a house in 2024. I haven't fact checked this but it sounds plausible.
What size gold bar would be required to buy an average house in Sydney in 1960?
And what happened to the 1050 children taken in Maui last year?
www.bitchute.com/video/Tn9kMFUoh5RH/
^ that should be in the funny videos thread. His hair alone is hilarious, let alone the rest of the vanity project going on there. A bit OTT to be truly great, but all the same, a worthy bit of satire about cause, correlation and the effects of a lack of cognitive logic.
lol
Select to expand quotemyscreenname said..
What size gold bar would be required to buy an average house in Sydney in 1960?
In 1960 the average size house in Australia was about 100 sqm. In 2024 it is about 230 sqm.
Gold in 1960 was gold. Gold in 2024 is still exactly the same gold. It hasn't changed.
If you are requiring a like-for-like comparison should it done on a square metre basis ? Or perhaps it should be a plain, industrial style gold bar versus a 2024 gold trinket infused with diamonds and rubies ? Or perhaps how much gold for an orange versus how much gold for an apple.
Or are we ignoring the fact that today, very few people would be willing to live in a 1960's house with 1960's fittings and furnishings ?
What does it take to request a fact check?Select to expand quotepsychojoe said..
Why not just compare them with gold. I wasn't alive in 1960 but I hear that you could buy a house for a gold bar back then, and it's said that the same weight gold bar will buy a house in 2024. I haven't fact checked this but it sounds plausible.
Is this myth true or false?
I dunno what the price of gold was in 1960. Gotta look it up.
Also I dunno what the price of the average house in Sydney was in 1960. Gotta look it up.
I can't find a reliable source for gold pre-1975, Aussie dollar started in 1966, so should be able to get a 1966 value ?
www.perthmint.com/invest/information-for-investors/metal-prices/historical-metal-prices/
Looks like in 1975 Perth Mint Gold price was $135, today $3500
As for the house price, I can't find a reliable source. Various links from Google say about $30k, but I can't see any for which the source is anything much more than anecdotal.
So 1975 best I got at the moment :
1975 $30k house / $135 gold = 222 ounces
2024 $1m house / $3500 gold = 285 ounces
But various google sources say house prices doubled 1970 to 1976.
On a sqm basis :
1975 you needed 2.2 ounces of gold to buy 1 sqm of house
in 2024 2.2 ounces of gold would buy you 1.8 sqm of a better house.
So kinda looks like gold has been better than houses since 1975. But this is poor and unreliable maths.
But then again, like I says, gold is gold. If you bought an average house in 1960, spent zero on it then it isn't worth the same as an average house today. The building would be worth about ziltch. Only the land would remain an asset. Whereas if you bought gold and spent nothing on it it is still gold. So I am not sure exacty what is being fact checked.
I mean if you read Psycop-joe's words literally, if you bought a house with a gold bar in 1960, then yes I reckon somebody else could buy a house with the same gold bar today. Would it be the statistically "average" house in 2024 versus the "average" house in 2024 - may be not, but would it be a house of comparable living standard ? Dunno, can't measure living standard with maths and statistics.
Select to expand quoteCarantoc said..
I dunno what the price of gold was in 1960. Gotta look it up.
Also I dunno what the price of the average house in Sydney was in 1960. Gotta look it up.
I can't find a reliable source for gold pre-1975, Aussie dollar started in 1966, so should be able to get a 1966 value ?
www.perthmint.com/invest/information-for-investors/metal-prices/historical-metal-prices/
Looks like in 1975 Perth Mint Gold price was $135, today $3500
As for the house price, I can't find a reliable source. Various links from Google say about $30k, but I can't see any for which the source is anything much more than anecdotal.
So 1975 best I got at the moment :
1975 $30k house / $135 gold = 222 ounces
2024 $1m house / $3500 gold = 285 ounces
But various google sources say house prices doubled 1970 to 1976.
On a sqm basis :
1975 you needed 2.2 ounces of gold to buy 1 sqm of house
in 2024 2.2 ounces of gold would buy you 1.8 sqm of a better house.
So kinda looks like gold has been better than houses since 1975. But this is poor and unreliable maths.
But then again, like I says, gold is gold. If you bought an average house in 1960, spent zero on it then it isn't worth the same as an average house today. The building would be worth about ziltch. Only the land would remain an asset. Whereas if you bought gold and spent nothing on it it is still gold. So I am not sure exacty what is being fact checked.
Thank you, I'm going to call it.
Myth is true
Don't worry about the 1050 Maui Children that were taken, that myth is debunked.
www.factcheck.org/2023/09/post-makes-false-claim-about-children-missing-after-maui-wildfires/
That's why we are such a great team.
You make all the hard decisions, all the captain's calls and punch the information into Seabreeze forumers and I sit outback doing the number crunching and providing the facts.
Like Turner and Hooch
or Yogi and Ranger Smith
or Fred and Wilma
or Top Cat and Officer Dibble
or Shrek and Fiona
or Marge and Homer
or....
Eric and Banana-man
In reference to the myth, I would think it matters how big the gold bar is (could be wrong)?
Otherwise the myth might never have been true.
Ye Olde Wikipedia says there are 3 standard gold bar weights
400 ounces. 1975=$54,000. 2024= $1,500,00
100 ounces. 1975= $13,500. 2024=375,000
1kg (32.15 ounces) 1975 =$4,320. 2024=$120,562
Depends where you're buying, but I think the smaller bars have been outpaced by house prices (except maybe in Port Gregory?)
But I liked Carantocs comparison of how much house you could buy for a couple of ounces
Select to expand quoteD3 said..
400 ounces. 1975=$54,000. 2024= $1,500,00
In Sydney The median house price is $1.6m in 1975 the median house price was roughly 33K.
As Carantoc pointed out houses now are superior to what they were in 1975.
While it's not exact, gold price does seem to follow property prices.
Myth true AFAIC.
This one is a fun read for you.
www.savings.com.au/home-loans/australian-house-prices-over-the-last-50-years-a-retrospective
Apparently back in 1970, your dollar would stretch about 11 times further than it does now , one of the comments (with heaps of caveats as to accuracy of data and working population make-up etc)
In inflation adjusted dollars, house prices are at or near all time highs. In 1970, an average house in Sydney cost around 20% of what an average house costs today. In other words, the ~$1.1m sale price of an average Sydney house today would buy you roughly 5.2 houses back in 1970. The trend is similar, though often not as significant, in all capital cities.
(Edit because I apparently forgot how to post a link)
