Financial Insights

Despite global conflicts, economic challenges, and tragedies, the S&P 500 Index rose from 58.11 on January 1, 1960, to 5,882 by December 31, 2024, yielding an average annual return of 10.46%, including dividends. An investment of $10,000 in 1960 would have grown to $6,429,000. The Ibbotson Associates US Small Cap Index averaged 12.54% ($21,624,656). The Ibbotson Associates US Intermediate Government Bond Index averaged 5.88% ($410,115).

According to the 2019 Retirement Confidence Survey of the Employee Benefits Research Institute, 60% of American workers say planning for retirement makes them feel stressed. But the reality is that financial planning isn't the cause of stress. The mind is! Master your mind, and you will master every aspect of your life.

About a third of the income level humanity has ever attained was produced from 2002 to 2022. Human ingenuity and adaptability, as expressed through Capitalism, reduced extreme global poverty by 130,000 people daily. Child mortality nearly halved — 4.4 million fewer children died in 2022 than in 2002. Chronic hunger was reduced by nearly a third. Global inequality declined for the first time since the Industrial Revolution. (Source: Johan Norberg, "Through Progress and Peril: The Precarious State of Human Freedom," and the Cato Institute.)

If you need $180,000 for your first year of retirement, in 20 years you will require $325,098 to match today's purchasing power. With an annual inflation rate of 3%, $180,000 would only be worth $99,660 of buying power in 20 years.

From December 31, 1925, to December 31, 2024, U.S. stocks exhibit both higher average returns and more significant volatility than bonds across all 5-year rolling periods. Over 30-year rolling periods, however, stocks maintain superior average returns AND demonstrate lower standard deviations than bonds — an insight often overlooked in financial education.