When thinking about where to put your money, I often get questions about which high yield savings account is best. They’re all so low these days it just doesn’t matter.
Cash under the mattress obviously isn’t a good way to go.
And your primary residence is more of a forced savings account than a great investment. The 3.7% rate of return shown here is based on the S&P/Case-Shiller U.S. National Home Price Index which tracks “same home” sale prices. This doesn’t even account for the expenses of owning a home (taxes, insurance, maintenance, realtor fees, etc). If you include those the average return is negative.
Index funds are still king. Buying and holding index funds is the most efficient and effective way to grow your wealth.
When I talk about index fund returns, I often hear “That’s not realistic! What about inflation?!” And for sure, that’s an important factor. A million bucks in 40 year