After 20 years of £20,000 annual contributions, a £400,000 portfolio should be much larger due to compounding. World index funds historically return 7-8% yearly, which means the balance should have grown substantially beyond the raw contributions alone.
What's happening? You've put in 20k every single year for the last 20 years, so 20 times 20, 400,000. That's what you have in your pot? No, wrong. If you have 400,000, something has gone horribly wrong because you've been investing, so it's supposed to be compounding, supposed to be growing. And if we go by returns, average returns of broad world diversified index funds, about 7 to 8% over the last— I mean, average return. Some years returns better, some years is worse. I think Last year or so, S&P 500 returned 25%. So I think that was over a year ago, and there's been years like 2022 when it returned -2%, but on average you're getting 78% growth.
