10 Years of CDs or SP500 ???

[heybro]

I'm at a fork in the road.

I can either put $15,000 a year in to CDs for 10 years -or- put $15,000 a year in to the SP500 for 10 years.

Can anyone tell me, realistically, what a general range of either choice would be after 10 years.

As far as I can tell, CDs should give me $160,000 (maybe 150k to 180k).  This assumes 2%. 

As far as I can tell, SP 500 could give me $200,000 to $250,000 best case but possibly drop to $50,000 very easily.  But if I let it sit, it could sky rocket back up after another 10 years.

I don't need the money as far as I can tell.  If I had it, sure, I could spend it by working part-time or buying a better place.  But, I don't need too.  I want to be safe but if I can be risky, why not go ahead and be risky.

Tough choice.

[the_fixer]

Here you go just put in your numbers and you will have your answer


https://www.daveramsey.com/smartvestor/investment-calculator



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[shuffler]

As far as I can tell, SP 500 could give me $200,000 to $250,000 best case but possibly drop to $50,000 very easily.

You can approach this a couple of ways.

You could use an average post-inflation yearly return (of, say, 7%), and do the math.
Using 7%, you'd get ~$207k.

Or you could use a historical-returns computation.  For example, you can coerce cfiresim to start with $1 and add a yearly income of $15k for 10 years, and then it will tell you:

   Ending Portfolio
Average:  $235,063
Median:   $224,819
St. Dev.:  $73,900
Highest:  $534,595
Lowest:   $103,011

... this is rather like the_fixer's suggestion of using a retirement calculator, but in this case you're not choosing the rate of return yourself, and are instead using historical data.  Both are valid approaches.

But I don't know where you got your $50k worst-case figure.  To end at $50k, you'd need something like an average yearly return of -25%, or perhaps a normal 7% yearly return followed by an 80% loss in the final year.  Though not impossible, these scenarios don't seem likely.