📈 Should you invest in index funds or individual stocks?
🧑💻 Your Timeline
A 21-year-old on r/stocks recently asked a classic question. Should you pick individual stocks to hit it big, or accept a steady 7% return from index funds? You hear about traders making hundreds of thousands of dollars. You also hear about people losing their life savings.
Statistically, the boring path wins. Most retail stock pickers underperform the market due to emotional trading and poor timing. This calculator projects your long-term wealth based on realistic numbers. You can see exactly how a slow and steady approach funds your future vacations and early retirement.
📈 Expected Returns
The Reddit poster smartly targets a stable 7% return. That matches the historical inflation-adjusted average of the S&P 500. Active retail traders typically earn much less. Dalbar's QAIB report shows average equity investors pull in around 4% over the long haul.
Chasing the market often means you end up lagging behind it. You can adjust these rates below to see how a few percentage points drastically alter your long-term wealth.
🔗 See Also
For further related reading, check out:
📊 Results
Index Fund Value
Stock Picker Value
Years to $1M
Bottom Line
Stick to Index Funds
Calculator updated by heyfinfam (v26.7.0) · View history
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