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Old 08-31-2016, 08:50 PM   #26
Mr.Coffee
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Quote:
Originally Posted by V View Post
Cool, thanks for that link. Using that calculator, it shows 5% without reinvesting dividends. That's a good point though that you should include reinvesting.
No, but hang on I think V has a point here even if you consider dividends reinvested. I think about this all the time and truly struggle with what to do with my excess money.

Paying down the mortgage is a lower ROI but assumes NO risk.

Investing in the market, even though demonstrated over the long run to generate approx. 5 or 8% ROI, still assumes risk. There's no guarantee that the stock market continually goes up and up and up.

Wars, major global depression events, global stagnation... I believe there are threats to the conventional wisdom that investments in the index automatically earn you that 5 or 8%. That decades lasting forever into the future will automatically generate returns. It is possible the index or market dips, even for a prolonged period of time.

Post World War 2 North American markets and economies are not the same thing as today's markets and economies, or the future's.

For the risk weary, paying down the mortgage likely is still a good call.
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