Transcript
The 10, 5, 3 rule.
This is the expected long-term return from equities 10%, bonds 5%, and cash 3%.
It hasn’t quite worked out like that since 2008, but it’s a long term view over 20 years.
See Also
Where Do Millionaires Keep Their Money and What Do They Invest In?Financial Planning Process | JamaPunjiUnlocking the Key to Wealth Creation: The Secret to Becoming a MillionaireYoung people say this is the No. 1 factor in building wealth—but this is 'the real key,' according to a money expertIt can be combined with the rule of 72, so we can see how long it takes for each asset class to approximately double in value.
Equities: 72/10 = 7 years.
Bonds: 72/5 = 14 years.
See Also
How to Build Wealth at Any AgeCash: 72/3 = 24 years.
If you have a target amount to achieve over 20 to 40 years, it shows why cash is probably not going to make it.
Equities are fastest and so should be able to reach higher targets but come with greater risk.
In the 10, 5, 3 rule, the real returns would be reduced by inflation.
Article is accurate at date of writing.
