A reader asks CNN Money columnist Walter Updegrave if he can achieve 20-30% portfolio returns over 30-40 years. Walter answers by saying “not bloody likely”, but just for fun let’s run the numbers.
Let’s assume someone saving $1000 in a tax-deferred account annually for 30 years. At 20% the portfolio would be worth $1.18 million. At 30% the value would be a staggering $8.7 million. Over 40 years, the results would be $7.3 million (at 20%) and a staggering $120 million (at 30%).
Warren Buffet has achieved average annual returns of 22.2% at Berkshire Hathaway over 39 years. However, Buffer himself warns that such returns are not possible in the future.
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