Hey guys... I made the page. Just saw lots of traffic coming from here so figured I'd come check it out.<p>A couple things I figured I should address after reading the comments:<p>1) Yahoo!'s historic S&P 500 data does not factor in dividends. So the returns would likely be 1-2% higher each year (which over time makes a very big difference). I should probably add a note on the page mentioning this.<p>Here was my conundrum when making the tool: I picked the S&P 500 because it's the only index that allowed me to pull very, very old data (nearly 70 years) using Yahoo! Finance; plus, it's often the "go-to" index for discussing overall market performance. But it's not "real" in the sense that you can't actually buy shares, and it doesn't pay dividends. So I could make up my own method for factoring in dividends, but I wanted to go strictly by the numbers. When you factor in financial advisor fees / bad decisions that new investors make, it's probably enough to "counter" the lack of dividends, if you want to look at it that way.<p>Plus, sites / companies are notorious for over-stating how much you can get annually by investing. I'd prefer to under-state it, if anything. Don't want to sell false hopes.<p>2) Regarding incremental, small deposits (and potential transation fees)... it's actually very easy to set up auto-investments in index funds that match the S&P 500 without ever incurring any fees. You could do $31 on the first of every month and basically simulate this.<p>3) Inflation would be useful to factor in, but it would also add confusion. This could be a cool add-on, but I'd have to think about the clearest way to demonstrate it. So would the 1950 daily amount be equivalent of $1 today? (so I'm guessing 20 cents or so?)<p>Hope you guys enjoy the site. Feedback is great (positive or negative - I'm not sensitive).
I invested my spare money in a computer, and it's definitely paid back more than the S&P 500 in salary. Using up limited funds in childhood on financial investments is just madness
Interesting, but I doubt people tend to invest this consistently and regularly. They probably have an easy time investing when times are good (and they actually have a few extra bucks to gamble with), and tend to not invest when times are bad (they're trying to eat).<p>Take someone who was doing pretty good during the tech and real estate bubbles, and decided to invest their spare change in 1998, 1999, 2005 and 2006, but did not invest in the "leaner" years. I bet that person overall would have lost money on the stock market. Oh, wait, I can tell you that that person would have lost money, because it was me!<p>I'm so tired of the constant drum-beat of "The only way to retire is to invest in the stock market!!" that only seems to serve the interests of Wall Street. I wish there were viable alternatives.
This also ignores the fact that your average person, until more recently, couldn't so easily invest in the S&P 500, without some big transaction costs. A couple of factors that make this possible today:<p>1. Online brokers, starting in late 90s, lowered retail trading fees, made access easier.
2. low-fee, highly liquid, highly competitive ETFs give anyone cheap exposure to the broader market indicators, like S&P 500.<p>So an ROI calculation from the 1970s is mostly academic, but I guess illustrative of what you <i>might</i> be able to get using that same approach over the next 30-40 years.
If you invested $1 each day of your life into a savings account, you'd have $0 for perpetually owing the bank maintenance fees.<p>My mother took us to the local bank one Christmas when we were children and put $100 each (interest rates were at a peak) into our accounts "so that we could learn about money". Five years later, we went back and found the bank had emptied the accounts steadily each month until nothing remained. The kind man who'd once helped us open the accounts was very apologetic about it, but explained there was nothing he could do to get it back.<p>That experience did teach me something about money, that you can't always count on it to be there and to be careful to whom you entrust it, but it also taught me about the banking system and saved me from simple mistakes I saw my peers making as I got older. I wouldn't have started investing so young if banks had never put a sour taste in my mouth.
This was presumably the rationale behind the UK's "Child Trust Fund" scheme: <a href="http://www.moneysavingexpert.com/savings/child-trust-fund-vouchers" rel="nofollow">http://www.moneysavingexpert.com/savings/child-trust-fund-vo...</a> which included a £250+ freebie to kick it off. However, none of the beneficiaries have matured yet.
$1 is 1981 was four popsicles from the icecream truck. Well worth it to be the king.<p>$1 in 1996 was a bottomless plastic cup of PBR. Also well worth it.<p>$1 is 2011 is the cost of an overnight diaper that my three year old son throws away in the middle of night because he says he doesn't like it.
A complete non-techie here. My takeaway is this: Wow, look at the value of saving and I've got to invest--not just save--for the first grandchild starting tomorrow.<p>My dad was banker and a saver so I grew up valuing saving just because. Like others here, the site makes it easy to understand how saving (as I read it, and yes, I know there is a difference) can yield lots of money! Now to share this with those in the social services world in DC so they can use it in their financial ed classes.
A variant is start with one penny a day and increase by one penny each day. People are adults by 10,000 days, middle age by 20,000 and die around 30,000. The accumulated amount is triangle numbers of days, or the day count squared, then halved. That would be a half million (10K^2/200), 2 million and 4.5 million dollars respectively for these 10K-round numbers. These are actually feasible investment amounts.
One of my favorite infographics is this one on the New York Time's website. It shows how much you would have made on investments over time.<p><a href="http://www.nytimes.com/interactive/2011/01/02/business/20110102-metrics-graphic.html" rel="nofollow">http://www.nytimes.com/interactive/2011/01/02/business/20110...</a>
Investment fees were high more than 25 years ago. I remember paying 3% to buy or sell a stock in the 1980s when you had to use brokers. That limited the kind of day trading strategies you could use. Its as little as a hundredth of a percent now for a large computer executed transaction.
This is only true if there were no fees associated with investing, which is ridiculous. If you went to a stock broker with a dollar per day, you would be very lucky to end up with $0.01 in equity that day.
Since so many people suggested it should include dividends and dividend reinvestment, I added that in, based on this chart: <a href="http://www.multpl.com/s-p-500-dividend-yield/table" rel="nofollow">http://www.multpl.com/s-p-500-dividend-yield/table</a> - as expected, it makes a huge difference if you go back a ways. (I had no idea dividends were so much larger in the 50s-80s). There's a toggle button to see with and without. Thanks again for the feedback!
Does this take into account commission fees ? If I am charged $7 per trade and I invest 1$ per day I am losing 6$ per day to commission. Or are you assuming this is commission free ?
1983 seems to be a magic year (there is couple of years in 1970s and 1950s). Coincidentally it is my birth year too. It intrigues what is happening with other peoples investments born on that year. Looking at my investments, how much are they worth? Not as much as what the tool says, but I do have 75%. These years (1983,1970 1950), are they special in a way? How are others doing?
Sorry, but those calculations are totally wrong.
They use the S&P index to calculate capital gains.<p>They ignore the dividends that are paid on your capital, which is a significant portion of your growth, often even more than the capital gains.
What would the present value of that money be, if in a bank? Something to compare to would be instructive.<p>For me, the stocks would be ~$260K. Simple interest (7%) would be $207K
The problem is that the stock market is a sort of "inefficiency": Companies would prefer to keep their own profits instead of giving them away to investors.<p>Yes, people have done well in the past, but I believe it's entirely possible for median market gains to disappear in the near future as this inefficiency is removed: We're seeing the start of this right now, in the way many of the more desirable "unicorns" are relying mainly on private equity and loans.
If you invested $1 in the market for that many years you'd be broke because of how many fees you'd have to pay for each $1 trade. It would make more sense to calculate it as $365 per year since your birth, then at least your fees would be minimal.
> no one does this<p>> I didn't have that much money when I was a child<p>> it was hard to invest in the S&P 500 until recently<p>A lot of you are missing the point. toado85 clearly made this to illustrate the behavior of the stock market in the long term; it's not a suggestion that you literally do what the hypothetical investment is doing.
Wat? Only 145k since 1969?? I was hoping to be a paper millionaire, minimum. Glad I spent it on (an average of) a couple of cans of beer a day instead.