What's a good rate of return on your 401k?

[CanardMedic]

Currently performing at 7.65%...according to google it says 5-8% is considered good but I'm a bit skeptic.
How would you allocate your investments to perform better?

Thank you

Currently have 80% in Index 500
15% in international index
5% in Real estate

[QisGQ]

Could be better, S&P is +16% YTD but yea not bad.

[nutsy54]

10+% over the long term, at least five years. Don't chase short term Market gyrations.

[tripod29]

Boomer Dave Ramsey says you should beat the market return by at least 5-7% annually. He sells books to show you how.


Boomer Dave.

[dyee4613]

Boomer Dave Ramsey says you should beat the market return by at least 5-7% annually. He sells books to show you how.


Boomer Dave.

Professional investors don't beat the market lol

[ralphlaurenbrah]

Whatever VOO or VTI gets you

[imbeingcereal]

Since most people just buy index funds (if they're not retarded) for their retirement accounts and the long-run return of the S&P is around 7.5%, anything above that is gravy. A lot of people here will brag about their insane returns because they've overloaded on stuff like Tesla, Crypto (during the bull cycles), meme stonks, etc. but that's not really sustainable. If you can regularly return 12% even annually, you're kicking some serious ass. That means you're doubling your money every 6 years.

Most people aren't patient though and treat the stock market like a casino, which means they either end up serious winners (who'll brag incessantly about it online and maybe blow up later from overconfidence) or serious losers who then get scared and never want to invest again. If you can temper your animal spirits a bit, I don't think it's too difficult to get 10% by some combo of picking decent companies and maybe even selling some OTM calls to generate some extra income.

[_zman]

Currently performing at 7.65%...according to google it says 5-8% is considered good but I'm a bit skeptic.
How would you allocate your investments to perform better?

Thank you

Currently have 80% in Index 500
15% in international index
5% in Real estate

7% with inflation is the goal and what you should get with index funds. I'd drop the real-estate personally. It doesn't perform the best over the long term in my research. Anytime there is a crash, buy it of course. I made a ton of returns in 2009-11.

Some small caps, consumer discretionary, tech etfs, even healthcare etfs have outperformed the S&P 500, but they're not my primary holdings.

[alfredw10]

Currently performing at 7.65%...according to google it says 5-8% is considered good but I'm a bit skeptic.
How would you allocate your investments to perform better?

Thank you

Currently have 80% in Index 500
15% in international index
5% in Real estate

Yes, 7% is normal for a moderate risk (50/50 to 60/40) well diversified portfolio. If you are taking more risk than you may be underperforming by a bit.

[Cartiac]

Yes, 7% is normal for a moderate risk (50/50 to 60/40) well diversified portfolio. If you are taking more risk than you may be underperforming by a bit.

7% long term 401k is no risk, it follows the same as everyone with the slightest bit of intelligence to not give away their money in those stupid targeted funds. You don't want risk in your 401k and they are all pretty structured only allowing to choose from specific funds so you don't even have the option of outperforming the S&P 500. But you should be doing better in your personal investment account, it is ridiculously easy. AMZN has more than doubled SPY annual returns over the last 10 years, more than 4x since inception (1997) and will easily continue to outperform for a very long time until there is some new, hugely disruptive technology event they miss.

[Bingo559]

dont forget to factor in those 1% management fees every year. at least most companies will do a percentage match though

[sooby]

you have to subtract your management fees and inflation

so if you are at 7.5%, maybe subtract 0.5% in mgmt fees and 3% inflation. You're left with a 4% increase. Honestly that's pretty poor. Inflation in reality is higher than 3% when things like groceries and rent are rising at a higher level and these are probably your biggest expenses. So in reality you might be breaking even, lmao.

If you own properties that are appreciating and have rental income obviously you are in a better place.

At this rate I think you probably want 10% returns at the very least. But it's unrealistic to see that much return every single year. 7-8% is about what you should expect on average every year. Less than that is pretty poor, more than that is pretty good. But in reality you need to get your salary bumps or have other income streams.

[Cartiac]

If you own properties that are appreciating and have rental income obviously you are in a better place.

Are you really though? The last person left holding the bag is not the winner, the people actually making money in real estate are the actual investors profiting off cashing out their properties as frequently as possible by making average people believe they are actually investing. The money in real estate is really made by the tons of people making based on the transactions of real estate sales, not so much the end customer that eventually ends up owning it. There is a reason people sell books and classes to people wanting to make money in real estate because they actually make money that way. If they could actually make money in real estate with the advice they are selling, they would not be telling you, they would be doing it themselves.