Originally Posted by Amnorix
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).
Great point. How has the inflation rate been recently? How quickly does it fluctuate? How predictable is it (and does predictability help an average investor)?