Compound interest vs real world

[Tkydon]

See what I wrote about Compound Interest in this other thread

viewtopic.php?p=26616#p26616

[trajan]

See what I wrote about Compound Interest in this other thread

viewtopic.php?p=26616#p26616

Very detailed and understandable even by me.

Thank you.

[beanhead]

My issue is with the assumption. What has been your experience return-wise over the last few years?

In one of my accounts I have eMaxis Slim S&P500 and the All-Country (ex-Japan).
Started about 1 year ago, mixture of lump sum at a rather bad time, and monthly regular contributions.

S&P500 up almost 8%
All-Country (ex-Japan) up just over 6%

As mentioned elsewhere, part of this paper 'gain' is due to the weak yen.

[trajan]

My issue is with the assumption. What has been your experience return-wise over the last few years?

In one of my accounts I have eMaxis Slim S&P500 and the All-Country (ex-Japan).
Started about 1 year ago, mixture of lump sum at a rather bad time, and monthly regular contributions.

S&P500 up almost 8%
All-Country (ex-Japan) up just over 6%

As mentioned elsewhere, part of this paper 'gain' is due to the weak yen.

Sorry, I just do not get notifications for some reason.

And thank you for the details.

If 8% holds, that's a doubling over 15 years (pure compound interest and reinvestment). I wonder how much is lost to taxes.

[Tkydon]

The USD denominated assets have benefitted, even as they were losing value in USD terms, by the weakening of the Yen to historic lows.

(149 Today -115 on 31-Dec-21) / 115 on 31-Dec-21 = 29.56 %

covering most of the loss of the underlying asset in USD...

If, in the long term, the Yen reverts to recent values, then that covering will be removed, followed by amplification of losses of the underlying asset in USD...

[Tkydon]

My issue is with the assumption. What has been your experience return-wise over the last few years?

In one of my accounts I have eMaxis Slim S&P500 and the All-Country (ex-Japan).
Started about 1 year ago, mixture of lump sum at a rather bad time, and monthly regular contributions.

S&P500 up almost 8%
All-Country (ex-Japan) up just over 6%

As mentioned elsewhere, part of this paper 'gain' is due to the weak yen.

Sorry, I just do not get notifications for some reason.

And thank you for the details.

If 8% holds, that's a doubling over 15 years (pure compound interest and reinvestment). I wonder how much is lost to taxes.

Nothing is lost to taxes until you sell.

If in normal accounts

If you sell at a loss, you can lock in or 'Harvest' the losses and off-set them against other gains to reduce or eliminate taxes on those gains.

If you sell at a gain, you will have to pay Capital Gains taxes at 20.315% of the Gain.

If in NISA

Nothing. There are not taxes on the Gains from a NISA.

If in iDECO

Nothing. There are not taxes on Asset Switches within the iDECO.

[trajan]

In one of my accounts I have eMaxis Slim S&P500 and the All-Country (ex-Japan).
Started about 1 year ago, mixture of lump sum at a rather bad time, and monthly regular contributions.

S&P500 up almost 8%
All-Country (ex-Japan) up just over 6%

As mentioned elsewhere, part of this paper 'gain' is due to the weak yen.

Sorry, I just do not get notifications for some reason.

And thank you for the details.

If 8% holds, that's a doubling over 15 years (pure compound interest and reinvestment). I wonder how much is lost to taxes.

Nothing is lost to taxes until you sell.

If in normal accounts

If you sell at a loss, you can lock in or 'Harvest' the losses and off-set them against other gains to reduce or eliminate taxes on those gains.

If you sell at a gain, you will have to pay Capital Gains taxes at 20.315% of the Gain.

If in NISA

Nothing. There are not taxes on the Gains from a NISA.

If in iDECO

Nothing. There are not taxes on Asset Switches within the iDECO.

Most interesting, both posts. Thank you.