Where does Dave Ramsey get 12\%?

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.

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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?

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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.