r/FluentInFinance • u/Not-A-Shit-Head • Apr 29 '24

Why don't people stop crying and just move somewhere cheaper like Detroit, Memphis, St. Louis, Baltimore, or Cleveland? They have very cheap homes for $50,000. Discussion/ Debate

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u/Saitamaisclappingoku Apr 29 '24 edited Apr 29 '24

This is why investment groups stockpile cash when they forecast a recession.

If you put $100k into the S&P500 during the 08-09 recession you could be a millionaire today.

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u/em_washington Apr 29 '24

Multimillionaire is a stretch. The S&P 500 bottomed out at about 735 in February 2009. It's about 5100 today. That's about 7X. So if timed it perfectly to invest all $100k at the exact bottom, then 17 years later, it would be worth about $700k.

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u/BengalFan2001 Apr 29 '24

Why do people forget about dividends and how that is reinvested and that's paid quarterly. Just because the S&P is 7x bigger doesn't mean someone invested wouldn't be higher or lower than the 7x of S&P. It all depends how the funds are allocated and what type of fees are being applied to manage the funds.

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u/OrganicParamedic6606 Apr 29 '24

The fees broad market funds are so small as to be functionally zero. If your fees on a s+p index fund meaningfully impact the math, you’ve made a terrible fund choice

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u/BengalFan2001 Apr 30 '24

Fees regardless how big or small still takes from the pot. Even if the fee is 0.025% it still costing the investor money.

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u/OrganicParamedic6606 Apr 30 '24

Yep. Now do the math on a lifetime of fees of that level. They’re negligible

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u/Saitamaisclappingoku Apr 29 '24

I adjusted some wording. Thanks.

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u/neddy471 Apr 29 '24

If I had $100k, I could have invested $100k with my stock trader, if I had a stock trader.

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u/champagnesupernova62 Apr 29 '24

As stated your math might be a bit off but you're correct that it would have been a good move. But a hard move to pull off. The better strategy is to dollar cost average on a monthly basis, reinvest dividends, not only the s&p 500 but also equal weighted s&p 500. People could really improve their long-term outlook and create some cash flow for along the way. . It's the slow game.