Historically the stock market has returned around 8% a year. This is an incredible return and will create massive wealth over time for you as an investor.
However, with stock prices so high currently and bond yields very low, many experts predict that the next decade will have slightly lower returns.
It would be safer to predict a return of around 6% per year. Still a great return that can create great wealth in the long run, but not as stunning as the past returns over the last few decades.
The thing about investing, though, is nobody ever truly knows what the future will hold. For all we know, the stunning market performance could continue. We could see 8% or greater returns over our lifetimes. On the other hand, the market could tank for many years and give us a measly 3% or so annual return over a decade. There is no way to know.
We know that if you don’t invest your money, it will earn no return. It will lose its value due to inflation. No matter what the future holds, the best solution is to start investing. Yes, this is the solution, no matter how little the amount. Start early and use the power of compound interest to build your wealth. Your future self will thank you.