The Real Numbers
Using 1965's 900 as a baseline for the dow... and comparing today's dow of around 10,000... we've got ourselves what seems to be a hefty 12x increase.
A quick jaunt over to see the money chimp reveals however, that in order to get a 12x increase over 40 years... you really only need a 6.21% rate of return.
So, not accounting for inflation... thats the Dow. 6.21%. Not 10%. Not 20%. Over 40 years... 6.21%.
Now... setting aside the fact that we have no legitimate matrix for measuring inflation.... at least not since the CPI was utterly bastardized... Lets, for arguements sake, compare the CPI of today, to say... 1965.
CPI today: 158
CPI 1965: 31
That's a 5x increase over the same period. Roughly, 3% per year.
So considering that the Dow... with all its wrangling... still only manages to outperform inflation, by a measly 3% a year....
And considering also... that bit that we previously set-aside... you know... the bit where the Feds simply cook the books, removing this and adding that, to make the CPI growth apear to be something around 3%.
With all of this deck stacking... you still end up with a pretty crappy investment return.
Kids... if you think you're gonna use the stock market to retire... you need to grasp the reality. It can be done. But you need to have your crap together to do it.
My advice? Better look at investing elsewhere, where its less complicated. Might seriously consider some rental property. It's pretty easy really. You figure out how much you need per month to live on, how much you can make per property, and buy that many. This is great, because as ya get older, you can sell them off for large lumps of cash, to use on heroine, cocaine, motorcycles, and sportscars, sky-diving, bull-riding, ultra-lite aircraft, and Class III license fees.
Why should your kids have all the fun?