Is there some flaw in the analysis?
...
Ps: lets remove the inflation out of the equation too 😊
In my opinion, it is the second statement above that is the flaw in your analysis. Inflation isn't a side issue, but the core issue when facing the rest of your life.
We often say we want "safe" investments, meaning we don't want them to be volatile. But a safe investment that lags inflation by 1-2% is not good--it's a guaranteed loser.
That is in contrast to some government pensions, which include a cost of living adjustment. To guarantee a return, through inflation over time, might really be a safe investment--at least, to the extent you can count on the guarantor existing to the end of your contract.
Stock and mutual funds can be unsettling because they are volatile. But over time, the volatility cancels out, and their outperformance becomes clearer.
You can obtain the first version of safety through private contract, of course. It's called an annuity. But they are relatively costly; their high fee structure means you need a significant lump sum to buy rather modest monthly payout.
So, it's understandable that stocks are popular; they are the cheapest way to security, even given their imperfections. What many do is to divide their money into buckets: a short-term bucket of cash for liquidity and spending; a medium-term bucket of safer investments (bonds, fixed interest accounts, reliable dividend payers) for good assurance of refilling the first bucket; and a third, long-term bucket of risk assets (stocks and funds) to keep your assets growing, and help you offset surprises and catastrophes in the future.
Maybe that's a more general description than you were looking for. But fundamentally understanding the difference between short-term fear of market volatility and long-term risks to your wealth is an important thing to settle in your mind in order to be at peace with whatever financial plan you make.
