At the end of the day, what’s more important to you? What you can spend or what percent you earn?
Rates of return are arbitrary in reality. The simple fact is you can’t spend a rate of return. What you spend rather, is the underlying dollars in your portfolio. You spend those dollars throughout your retirement, and those dollars lose real value over long periods of time due to inflation.
Just look at a stamp 30 years ago:
And then look at a stamp today:
So the question is what really matters in life? Investors fall into the trap of trying to beat the markets, or beat their neighbors investment return. But in the end, it’s what you can spend, and the offset for inflation throughout your retirement lifetime that really matters!
