^This is true. But it makes me wonder. Do you mean 1% increases in stock prices (for example, S&P 500), or 1% growth in the US economy, or...?
Just to make sure you know: 1% growth in the economy can support more than 1% growth in your portfolio. Your portfolio, if invested with a stable percentage of stock vs bonds, could easily grow faster than the economy.
No, "the 1% growth" comment is based on expectations of 1% growth after inflation in a 90% equities indexed fund, from sources such as Vanguard. See:
https://www.youtube.com/watch?v=wuFZDuP8BRw. That's growth
from the fund itself, not growth in the economy as a whole.
1%.
Perhaps you can see why I'm feeling a bit negative.
If it were 1% over the next 5 years, followed by maybe 3 or 4%, then cool, 5 years isn't too long to wait for
some form of growth.
If it were 4% over 10 years, also cool, that's enough growth to reach enough savings to be able to afford to live off 4% and have enough income to afford to rent a modest 1-bedroom apartment within 1 hour commute of a major city with some basic emergency medical care.
But 1% over 10 years? Are you kidding me? At that rate, I'll be lucky to scrape over 1.2M by the age of 40, and then I'll have to hope and pray that a 1% drawdown won't destroy my principal. 1% of $1M is $10,000 per year. That is not enough to afford a
single bedroom within 1 hour commute of practically anywhere, let alone the cost of food and medical care.
So if 1% over 10 years followed by anything less than a full 4% is what I have to look forward to, no, I don't think I'll be
retiring early anytime soon. I think I'll be working full-time for practically my whole life.
Outside of from cheap index funds like Vanguard Growth 90%, I don't know how much more growth and risk I could achieve, while not being a professional investor and not wanting to take stupid gambles on stocks I don't know enough about.
Again, maybe I'm only looking at the negatives. I suppose the positive is that I'll remain cash-rich in a 1% growth environment, so at least I have a big huge safety buffer of principle to draw on if I ever need it.
And my occupation isn't the worst in the world, I could probably find jobs I enjoy.