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Author: helpisnowhere One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 294  
Subject: give me 25K for 60 years Date: 2/3/2005 7:12 PM
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And so it is said - there's money in compounded interest. I'm for that! So my solution - unworked out at this point - just a budding thought so to speak, is to give each newborn $25,000 and put it in something like the S&P Index Fund. My understanding is that this Fund averages 11%. So let me keep 8% and the Goverment can have the overflow. Of course in lean years, the Gov. can take that money saved and get me back up to the 8%. Now let it sit and compound for 60 years. If I did the math correctly, that will give me 2.5 million on my 60th birthday. I'm only asking for 25 thousand Uncle Sam, and really that's a lot less than you're giving me now.
Now if I die before I begin to work, put the money back in the pot. And if I don't work because I'm lazy - take a bit away. The lazier I am, the more you get back. And if I'm disabled, other taxes should be communal in nature - as it is now.
I'm asking the Gov. to bank 25K in my kids name at birth and then not contact her till she's 60. Really Unc. Sam, she promises not to bother you again!
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Author: jrr7 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 178 of 294
Subject: Re: give me 25K for 60 years Date: 2/4/2005 3:50 PM
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A few things you're missing:

- Since the Great Depression, the S&P has averaged 11%. The 20th century has been a remarkable bull run for stocks and there's no reason to believe that it's going to continue.
- That's 11% before inflation. After inflation takes its bite, the actual numbers are lower.
- That's 11% long-term average. Your 60 years may be higher or lower than the long-term average.
- If the market has several down years in a row, the government would be wiped out.
- If the market has several up years in a row, someone in government is going to find a way to divert the excess money.
- All these new people investing in the stock market is going to seriously throw the system out of whack. Indexing only works when enough people are making decisions about whether certain companies are worth buying. If everyone is buying like there's no tomorrow, you get a bubble -- a pyramid scheme.

I'd suggest looking up the Retirement Investing and Political Asylum boards.

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