I just opened a Roth IRA, and am ready to invest in the stock market

[spaggyroe]

The only thing I'm doing is contributing to a 401k account. I started sometime in the middle of 2015. Yesterday, for the first time, my balance showed $100k. Here is how that breaks down.
employee contributions: $43k
employer contributions" $15k
change in market value: $42K

Anyone know if these numbers look right? I know the contributions can be whatever, but change in market value? My investments are almost entirely stocks. Looking over the years my low was like -9% and the high was almost 28%. I have 19 more years till I want to retire. I really have no idea how much I'll need to have saved.

Check out the "rule of 72". This is a quick way to roughly estimate how long it'll take to double your money.
I generally assume an average market return rate of about 8% for my calculations.
72 / 8 (percent return) = 9 years (for your money to double, with no additional contributions)
@glockman is killing it at 5-7 years.

For forecasting into the future, including your monthly contributoins, I like Dave Ramsey's investment calculator. It's really easy to use.

Investment Calculator

Put your current investment totals, your contributions and your annual rate of return into the investment calculator, and we'll show you how much you can expect to have in your investment portfolio over time.<br/>

www.daveramsey.com

How much you'll need at retirement depends on a lot of factors. Your lifestyle, health, etc.

I personally follow the 4% rule. Meaning 1 million in retirement will (highly likely) allow for 40k annual income indefinitely. Since I don't have any kids, I don't know how worried I am about maintaining anything indefinitely. Hopefully my last check bounces.

 

[glockman]

Check out the "rule of 72". This is a quick way to roughly estimate how long it'll take to double your money.
I generally assume an average market return rate of about 8% for my calculations.
72 / 8 (percent return) = 9 years (for your money to double, with no additional contributions)
@glockman is killing it at 5-7 years.

For forecasting into the future, including your monthly contributoins, I like Dave Ramsey's investment calculator. It's really easy to use.

Investment Calculator

Put your current investment totals, your contributions and your annual rate of return into the investment calculator, and we'll show you how much you can expect to have in your investment portfolio over time.<br/>

www.daveramsey.com

How much you'll need at retirement depends on a lot of factors. Your lifestyle, health, etc.

I personally follow the 4% rule. Meaning 1 million in retirement will (highly likely) allow for 40k annual income indefinitely. Since I don't have any kids, I don't know how worried I am about maintaining anything indefinitely. Hopefully my last check bounces.

To be fair, I started contributing in 2001, shortly before the crash after 9/11. Then rode the wave up to 2008, then have doubled down on the wave up from there. So I have been "investing" during some interesting times. Not like the 60's-late 90's.

 

[skippy]

I plan on leaving most of my money in the market even through out retirement. At a minimum I need/want 200k/year to live on in retirement. which very roughly translates into 2 million in the market but if money is doubling every 9-10 years that can quickly turn into 4 million before I turn 70 if I leave it in the market.

 

[spaggyroe]

That brings me to my next thought. What do you do with the money once you retire? Move it into a savings account earning 1%? I'm not for sure, but I seem to recall my mother moving my dads 401 into an annuity. And as I recall it was guaranteed 8% for life without ever touching the original balance. In your example, that $320k a year. Not too bad.

You can leave it in your retirement account and (on average) earn way more than 1%.
Most traditional retirement accounts prevent early withdrawl before age 59-1/2. There are some ways to work around this.
RMD's (required minimum distributions) kick in at age 72. The government wants their taxes! lol

 

[Greg]

Invested most my profits in magic mushroom stock $MINE. WISH ME LUCK ! 42k shares

I'll join you on this trip! 10k shares.

 

[spaggyroe]

I'll join you on this trip!.

 

[N-Smooth]

I'll join you on this trip! 10k shares.

Peer pressure... 14k shares...

 

[Greg]

Peer pressure... 14k shares...

Didn't they tell you that's how you get hooked?

 

[Kiel]

They have a side crypto biz also. We're taking this thing to Uranus!

 

[TurboMinivan]

I started sometime in the middle of 2015. Yesterday, for the first time, my balance showed $100k. Here is how that breaks down.
employee contributions: $43k
employer contributions" $15k
change in market value: $42K

Anyone know if these numbers look right? I know the contributions can be whatever, but change in market value? My investments are almost entirely stocks.

I did some quick math based on this info you posted. Your total amount contributed (including your employer match) is $58k. If you started in the middle of 2015, I estimate that was ~68 months ago. This means you are contributing about $850 per month. Using an online investment calculator, starting with $0 and adding $850 every month for 6 years, a current balance of $100k requires an average yearly return of +16%. This compares almost identically to the return of the S&P500 over the same time, which means your figures sound about right.

(Historically, the S&P average gain per year is less than that. However, we've been on a pretty sustained bull run in the market since 2009.)

 

[UNSTUCK]

I spent some time on those calculators and read that the S&P average is 12% for the last 30 years. Is it then safe to use that number when figuring your total retirement numbers? 8%, 10%, 12% changed the final number A LOT.

 

[Unimog]

I spent some time on those calculators and read that the S&P average is 12% for the last 30 years. Is it then safe to use that number when figuring your total retirement numbers? 8%, 10%, 12% changed the final number A LOT.

I've never heard of a financial planner who made plans based on anything over 7 or 8%. The problem is you get that return over the long term, but there can be 5 year periods that are much, much less. If that 5 years hit just before you retire, it could throw a wrench into any plans.

 

[TurboMinivan]

I spent some time on those calculators and read that the S&P average is 12% for the last 30 years. Is it then safe to use that number when figuring your total retirement numbers? 8%, 10%, 12% changed the final number A LOT.

No, it is definitely NOT safe to use those numbers for any sort of long-term estimating. The S&P500 has returned a total of +111.01% over the last five years to date (source), which works out to an average of +16% each year. Like I said, we've been in a bull market and thus performance has been spectacular in recent years... but don't fall into the trap of thinking that's how it always has been and always will be. Depending on which exact time frame you use and precisely how you do your math, the S&P500 returns more like 7-11% annually on average. Indeed, over the last ten years to date the S&P500 has returned an average of only +7% each year.

Most financial advisors strongly suggest using conservative market gain estimates (ie, 7 or 8% annual average growth) when you make any sort of projections about future values, and I agree completely.

 

[mesha]

My current favorite thing (besides watching my BTC go crazy) is looking at income generated by dividend positions. I am not at very much right now, but it is really cool to be building a passive income stream. At this point, it is less passive since I am putting a bunch of time into learning, but the future should be more passive. I find this WAY more fun than looking to buy and hold stocks mostly for growth. I have a few of those, but really like the dividend side of things.

 

[mesha]

Also, I got super lucky this week and bought chevron before Warren Buffet announced a new huge position in the company. So, I made some decent money because of that. Like 5% in a couple days. Sometimes it is better to be lucky rather than good.

 

[TurboMinivan]

My current favorite thing ... is looking at income generated by dividend positions. I am not at very much right now, but it is really cool to be building a passive income stream.
I find this WAY more fun than looking to buy and hold stocks mostly for growth. I have a few of those, but really like the dividend side of things.

As I explained long ago in this thread, the entire purpose of my Roth account is to build passive income via dividends. As it happens, this month is a milestone: my first month of triple-digit dividend income! So far in Feburary I've received $107.93 in dividends; LTC will pay me another $4.71 next week, bringing my total to $112.64 for the month. This is really exciting for me, and I look forward to seeing compounding growth over the years.

"Do you know the only thing that gives me pleasure? It's to see my dividends coming in." -- John D. Rockefeller

 

[mesha]

That is so exciting! Your earlier posts on dividends where definitely helpful to me. I have a few reits which LTC looks to be, but I guess I need to look into LTC . Most of my dividends come from T

 

[jeeper]

As it happens, this month is a milestone: my first month of triple-digit dividend income! So far in Feburary I've received $107.93 in dividends; LTC will pay me another $4.71 next week, bringing my total to $112.64 for the month.

So do you 'eat your children' or reinvest the income? I think it would be awful temping to go out to buy go fast parts with that money.

 

[TurboMinivan]

So do you 'eat your children' or reinvest the income?

I have my Roth set up to reinvest all dividends automatically. That way I can maximize my compounding returns--not only does my money earn more money, but the money it earns also earns me more money, and on and on. Factor in the dividend increases themselves and it's like compounding on top of compounding.

 

[TurboMinivan]

DISCLOSURE: I am not a financial advisor. You should always do your own research before investing in anything, and never blindly follow the actions of any random guy on the internet or in any 4wd-based forum.

I have a few reits. I guess I need to look into LTC

Of my 21 holdings, 5 of them are REITs. LTC properties (LTC) and Realty Income Corp (O) are a bit unusual in that they pay monthly (the other three pay quarterly). Monthly payouts make for a smaller dollar amount in each transaction, which in turn buys me a smaller amount of additional shares in each transaction, but overall I like these two companies and their history of continuous profits.