Originally Posted by La literatura
Just for fun, with an interest rate of 8%, a $10K initial deposit into a savings account would yield $20K in 9 years. But with an interest rate of 1.5%, it would take 48 years to reach that amount.
That is fun to think about, no?
So, what can get me a return on my investment of 8%? That's what I want.
Sure, fun, but you're forgetting (as everyone does), that money was tighter then, and inflation higher, and loan rates much higher. The average person could make 5+% on a bank account, and 8+% on a CD, but had to pay 10+% on their mortgage and 12% on their car loan while inflation is going up 5% per year. Your investment returns are subject to the LAW of inflation. If you make 1% on your ultra-conservative CD and inflation goes up 2%, you have LOST purchasing power.
Everything is relative to everything else. A 5% return in a 3% CPI inflationary year is BETTER than an 8% return in a 10% year (God help us).