Carantoc said..
Okey-dokey, so just the maths, no opinion, and simplifed to a reasonable amount for the purposes of the exercise :

Start paying super / saving for retirement at 25, retire at 65
Average wage today : 90k per year
Pay rises over the years at 3% per annum, raised once per year
Super / retirment investment contributions made quarterly at 9% of gross pay (ignoring compulsary super raises of recent years)
Anytax on contribution does not reduce the contribution
Super / reitrement investment earns 4% annual (inclusive of all costs), interest paid quarterly
Then at retirement super account would hold $411,632

If you earnt 5% annual on the investment holdings then account would hold $513k

Sticking with the 5% interest, if you paid an additional voluntary contribution of 1% of gross pay (so about $17.31 a week at today's $90k per annum average wage, but was about $5.46 per week at 25 years old) then super account would hold $570k

To get $1m you have to either :

Additional voluntry contribution of about 10% gross pay (so equavalient of about $173 per week at today's $90k average wage, about $55/ week at 25 years of age)

or, no additional voluntary contribution and earn about double the average pay (so about $180k per annum gross todays money, about $56k when aged 25)

or no additional voluntary contribution (9% of gross pay only invested), earn average wage (90k today) and you'd have to earn 7.75% interest on your super / retirement account

Or randomly if you had no additional voluntary contribution (9% of gross pay only invested), earn average wage (90k today), but earn 6.5% interest on your super / retirement account and start off age 25 with a lump sum amount $25k (about equal to annual gross wage of $28.4k), you'd hit the $1m mark.

Or if you invest wisely and if the super makes 9.5% as Mr Milk summarised above, then you could have retired 5 years early on $1m lump sum, at 60 years old, earning at the time $77.6k per annum. If you'd have kept working to 65 you'd be on about $1.59M lum sum. And you only have had to pay in the 9% compulsary super contribution.

So, mmm, dunno I'd conclude not easy if you just do vanilla compulsary super contribution into a default fund, but not impossible if you add a bit more or earn a bit more interest or dabble in a bit of bitcoin or something. Oh sorry, no opinion.

hitch_hiker said..


Its D3 - so he means She-pox

myscreenname said..
In 2065 $1m will be a fraction of what you would need to retire. You need $1m to retire comfortably in 2024.

Using the future value calculator and an average inflation rate of 4.88% in 40 years you would need to save $ 7,014,936.50

www.calculatorsoup.com/calculators/financial/future-value-calculator.php

I understand that wages would also increase over the same period, but they lag behind inflation. Since 1998 wages have increased by an average of only 3.12%.

If you study this entire website - like I did - you will see your maths is NQR.

Carantoc said..
Then again not many 25 year olds start work on the average wage. And not many people do the same job for 40 years on the average wage and an average wage increase.

Should probably include a lower wage at the start and a higher at the end, even if the total 40 year wage is the same, compunding interest will make a noticeable difference.

But then in Oz we also get a means tested age pension. I assume the lump sum end point ignores this ?


What was the question again ?

Mr Milk said..


So if inflation has averaged 4.9%, the real return on shares has been 8.1%.
Over a 40 year period the original investment has been multiplied 22 times in real terms.

myscreenname said..




So does the 8.1% include reinvesting dividends? I'd like to compare house prices in capital cities which also includes rental returns. I've heard people say shares have performed better, but I'm not convinced.

psychojoe said..
Why not just compare them with gold. I wasn't alive in 1960 but I hear that you could buy a house for a gold bar back then, and it's said that the same weight gold bar will buy a house in 2024. I haven't fact checked this but it sounds plausible.

Max Igam said..
I'm talking 1050 kids gone without a trace. They have absolutely no clue where these children are. It's like they vanished into thin air.

They've stolen between 1000 and 2000 children.

myscreenname said..




So does the 8.1% include reinvesting dividends? I'd like to compare house prices in capital cities which also includes rental returns. I've heard people say shares have performed better, but I'm not convinced.

myscreenname said..
Carantoc, what size gold bar would buy an average house in Sydney in 2024?

Pcdefender said..
If true .....

Carantoc said..

Carantoc is not the suppository of all knowledge.

I believe average Sydney house price recently hit $1m ?
Gold price about $3,500 / ounce at the moment ?
So $1m / $3,500 = 285 ounces (had to use the calculator for that one, a Casio fx-100AU)
Ounces are for smounounces, so using my little convertor pop-up program thingy it is about 8kg of gold.

8kg is the typical weight capacity of many washing machines, so perhaps think of it as one week's worth of myscreenname's dirty laundry ?

Carantoc said..
Carantoc provides a fact check service.

psychojoe said..
Why not just compare them with gold. I wasn't alive in 1960 but I hear that you could buy a house for a gold bar back then, and it's said that the same weight gold bar will buy a house in 2024. I haven't fact checked this but it sounds plausible.

myscreenname said..
What size gold bar would be required to buy an average house in Sydney in 1960?

psychojoe said..
Why not just compare them with gold. I wasn't alive in 1960 but I hear that you could buy a house for a gold bar back then, and it's said that the same weight gold bar will buy a house in 2024. I haven't fact checked this but it sounds plausible.

Carantoc said..
I dunno what the price of gold was in 1960. Gotta look it up.
Also I dunno what the price of the average house in Sydney was in 1960. Gotta look it up.

I can't find a reliable source for gold pre-1975, Aussie dollar started in 1966, so should be able to get a 1966 value ?
www.perthmint.com/invest/information-for-investors/metal-prices/historical-metal-prices/
Looks like in 1975 Perth Mint Gold price was $135, today $3500

As for the house price, I can't find a reliable source. Various links from Google say about $30k, but I can't see any for which the source is anything much more than anecdotal.

So 1975 best I got at the moment :
1975 $30k house / $135 gold = 222 ounces
2024 $1m house / $3500 gold = 285 ounces

But various google sources say house prices doubled 1970 to 1976.

On a sqm basis :
1975 you needed 2.2 ounces of gold to buy 1 sqm of house
in 2024 2.2 ounces of gold would buy you 1.8 sqm of a better house.

So kinda looks like gold has been better than houses since 1975. But this is poor and unreliable maths.


But then again, like I says, gold is gold. If you bought an average house in 1960, spent zero on it then it isn't worth the same as an average house today. The building would be worth about ziltch. Only the land would remain an asset. Whereas if you bought gold and spent nothing on it it is still gold. So I am not sure exacty what is being fact checked.

D3 said..
400 ounces. 1975=$54,000. 2024= $1,500,00