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Chart of the Day: 20 Year 7/10 Rule

Crews Bank & Trust Wealth Management Services Feb 1, 2024
nominal return in blue, real return in red

Contents

Today’s Chart of the Day shows historical 20-year annual returns going back to 1947 compiled by Nicholas Colas with DataTrek. It shows that the Nominal Growth rate averaged 10.8%, and the Real Growth Rate (which is after inflation) is 7.1%.

According to the past, the 7-10 rule of thumb could be a viable assumption for a well-managed diversified stock portfolio. The 7-10 rule states it takes 7 years for money to double at 10%, and 10 years to double at 7%. So if you have $100,000 now and plan to live for another 30 years, the past indicates you could experience three “doubles” so your $100,000, would go to $200,000, then to $400,000, then to $800,000. 
Chart of the Day

About the Author

Crews Bank & Trust Wealth Management Services
Crews Bank & Trust Wealth Management Services

Experienced professionals from our wealth management services team can help you achieve a bright financial future through investment strategies tailored to you. We’ll show you all of the options available and help you choose the ones best suited to you. We’ll provide high-quality, personal service as we work toward your goals together. Our Portfolio Managers do not receive commissions on trades; our recommendations of investments are based solely on your best interests.

Investments are not a deposit or other obligation of, or guaranteed by, the bank, are not FDIC insured, not insured by any federal government agency, and are subject to investment risks, including possible loss of principal.

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