Mark Moss uses a retirement planning tool to show why your investment strategy might not get you where you need to go. Starting with $625,000 and an 8% annual return, his projection reaches $1.3 million in ten years, but falls $3.7 million short of a $5 million freedom target.
So your typical 401 mutual fund mix. So if you have like a pension fund or a plan administrator or financial advisor, you might have just like a typical 401 mutual fund mix. You can just click this button here. If maybe your advisor probably puts you in like a 60/40 portfolio, it's like the most common portfolio financial advisor will put you in there. That's 60% equities, 40% bonds. You can click that, you get about 6% a year. Maybe you're a fan of like Ray Dalio and his all-weather portfolio. And so you want like 17 different, you know, uncorrelated assets, get about 5.5% per year. Conservative diversified, Or, you know, if you're doing better than that, enter your own, and then you can just choose, you know, whatever rate of return you're getting here. Let's say that you're better than all of these. So we'll put it at 8%. Okay, now we can see our path just like Google Maps. We can see what route options we have. Show my current path. And this shows me right here at my current estimated growth rate of 8%, my starting base of $625,000, I'm projected to get to $1.3 million in 10 years. That's my trajectory. But shoot, my freedom target was $5 million, and I'm only projected to get to $1.3 million. I'm off course. Hmm, let me click on this, show my gap, and we can see it. I was projected 1.3, I wanted to get to 5 million, I have a gap of 3.7. I'm way off track.
