@shrewdinvestor. Thx although I would hope that this post is taken as not prescribing one right or wrong way to do things but as an illustration of the famous ‘choices have consequences’ saying.
@sparkly. Beware he who will not read anything due to the fact that it is more than one paragraph as he may well be the same person who wont read the fine print on their mortgage documents or insurance policies or simply relies on his broker’s BUY/SELL recommendations as its too much work to read financial statements. Let each person read and reach their own conclusions
@bird_man. Have you managed to derive the rent? Please share your answer with the rest of the class
@kalameni. Arriving at how much the house would be valued is an area where I would like those with more knowledge than me in this area to assist. Sh. 14.3m to 50m is 6.5% annual growth but my view is that there just may be a ceiling valuation that apartments especially will struggle to surpass. But prices for apartments in Manhattan could prove otherwise.
@lollest!. Very true that a high savings rate has been assumed. But if a person was save and deploy to investments even half of what John and Charles did, they would still end up in a good situation at retirement. Remember that one assumption is a non-working spouse. If the spouse brings in income then the savings goal becomes more attainable. My hope is that this post will inspire at least one person to give it a shot
@takeshi. Good question.
Click this link to see an analysis of historical returns for the US stock market. I am yet to see a similar one for the NSE and would love to hear from our stocks gurus on what an average return is reasonable projecting into 20yrs. But studies show that stocks have generally outperformed other asset classes over the long term and I believe that 13% is achievable and some would say even on the conservative side. Remember that the ‘real’ return will require that you adjust the figures for inflation so the 110m networth of 2035 is not necessarily the same as 110m of today but is still a good networth for retirement. The main issue may be just how liquid the networth is to support your living costs.
@xsk. Well put. Past performance is not a guarantee of future returns but can be a good guide
Some major assumptions taken in the posts include that both John and Charles don’t lose their jobs or die, that they don’t get better jobs elsewhere, that they don’t get catastrophic medical issues or have to support others with such issues, that their pension does not require contribution from their pay in which case their net pay will need to reflect this, that the mortgage rates remain fixed as variable rates can mean significant changes in the monthly mortgage amount and any other assumptions that wazuans can pick out