Statistical Optimism: Investing For The Long Haul

After seeing the numerous ads for Robinhood and Acorns I thought I'd give it some thought ... so yes good marketing on their part! That's something quite rare IMO. In the end I wound up using Acorns and NOT Robinhood because I'm working the whole time the stock market is open, so day trading on Robinhood would be futile for me. Also, if you use that Acorns link above you and I will get 5 dollars, so if you want to support me please use my referral link above.

I spent about a month rehashing my old macro and microeconomic textbooks from HS and college to better prepare for the decision on the theoretical level. I then spent another month looking at the pragmatic portion of this decision: is it worth it and at what point should it likely become beneficial? As many of you might already know I've been in the US Army for just over a year now and have worked out my financial situation accordingly.

I follow a modified 50/30/20 rule currently. My monthly income from the US Army fluctuates between 1400 and 2000 (16.8 - 24k annually), with a rough average of 1550 and yes I realize how transparent I'm being about my income. I don't have financial troubles so I see no shame in showing how much I can make currently at my job.

Rounding my average down to 1500 to use as my monthly budget works very efficiently for me. I set aside 500 for my investment on Acorns, 500 for food, 65 for internet, and roughly 435 for any spontaneous money needed. Anything left over is simply put into my savings. If you want a helpful FREE budgeting program I'd suggest using Mint. Very straightforward program and has many extra programs attached to it to help you succeed financially.

Anyways, getting back to the more numbered nature of this post, here are some important facts about the stock market I took into consideration:

Investing returns an annual average profit margin of about 9.5% (just over 7% when adjusted for inflation); if you want to lowball use 5%. Although the stock market’s performance may go down in the short term, over the long term, it has consistently increased.

With these in mind and some iterative mathematical processes I estimate that if these facts hold (even if lowballed) that my profits in yearly succession for the next 3y will roughly follow: 300, 615, 950. In total for the next 3y I don't expect much profit because the investment game starts slow and then starts to sprint, but still an extra 1.86k is nothing shabby. Looking further into the future, when I am 60yo, if I average 2% profit margins then I'll of made 0.12M in profits; respectively 5% yields 0.45M and 8% yields 1.2M. It's always been one of my goals to be a millionaire so hopefully it sides towards that historical near 8%!

After I get out of the military I feel like I will pick up day trading in some fashion with powerful programs created by TD Ameritrade like ThinkOrSwim. Here's a small glimpse of ThinkOrSwim:

You can find videos on YT by Ricky Gutierrez of just how powerful this program is. Regardless, I'll keep you guys posted on this investment; look for it in my Blog portion of the Publications Page.

Acorns Referral Link:
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