Where does Dave Ramsey get 12\%?

Where Does the Idea of a 12\% Average Mutual Fund Return on Investment Come From? When Dave Ramsey says you can expect to make a 12\% return on your investments, he’s using a real number that’s based on the historical average annual return of the S&P 500. The what? The S&P 500.

What is a realistic rate of return on investments?

Most investors would view an average annual rate of return of 10\% or more as a good ROI for long-term investments in the stock market. However, keep in mind that this is an average. Some years will deliver lower returns — perhaps even negative returns. Other years will generate significantly higher returns.

What is the average return on investment in mutual funds?

If you’re looking into investing in mutual funds, you’ll want a sense of the average return before making any moves. In 2020, mutual funds in seven broad categories have averaged a return of roughly 10\%, almost double the average annual return over the past 15 years.

What is Dave Ramsey’s 12\% return on investments?

When Dave Ramsey says you can expect to make a 12\% return on your investments, he’s using a real number that’s based on the historical average annual return of the S&P 500. The what? The S&P 500.

Should you follow Dave Ramsey’s investing philosophy?

Following Dave’s investing philosophy has inspired tens of thousands of Americans to start investing in order to reach their long-term financial goals. Don’t let your opinion about whether or not you think a 12\% average mutual fund return is possible keep you from investing.

Is Dave Ramsey right about the S&P 500?

Dave’s premises are wrong about the S&P 500. The index has only averaged 10\% since the mid-1920s, and only 9\% since 1871. This is far short of his 12\%. However, there really is a mutual fund that has averaged 12\% since 1934. There are others that have averaged a similar return over the same time period.

Is Dave Ramsey still giving the same stock market rant?

In his latest rant, Ramsey is still giving the same sermon about getting a 12\% return in the stock market. For more information, you can check out Dave’s website or watch the heated video below.