let's say the year is two thousand you decide you're gonna start investing so you do 22 years
later you now have enough money that will grow you to get ready for it two million dollars this video
is gonna be wild you gotta make sure you stick with me all the way through because the data that
i'm about to share with you in today's video will absolutely blow your mind i most recently did a
video comparing qqq to qyld and we talked about the fact that once you build up your fund and
you start using that money for retirement how that could grow to 1.2 million dollars despite the fact
that you're actually withdrawing money it grows even though you're withdrawing money well today
thanks to this comment right here we're going to compare vti to qqq now vti is vanguard's total
stock market index and the interesting thing would be that once you save up enough money and you
start withdrawing could you still see growth on your portfolio despite the fact that you're using
money from the portfolio every single day from august 2014 to august 2022 you're gonna put 500
every single month into vti and into qqq now 500 a month that's a little bit less than the
other video in the other video i was saying two thousand dollars a month and you guys said that
seems like an incredible amount of money two thousand dollars a month is almost impossible
but i thought wait a minute five hundred dollars a month may be more attainable why because instead
of going into car debt instead of actually buying a car and you know having that debt of 500 a month
you're gonna instead invest it into these two funds because in august of 2014 you thought to
yourself oh god oh crap i need to retire soon or i want to retire early and my goal would be retire
at the end of august 2022 well congratulations because you have achieved that goal let's see
what happens with your portfolio though because you're going to be withdrawing money so right
down here we're going to analyze the portfolios and by investing 500 a month every single month
between august 2014 and august 2022 here's what you got your vti balance has grown to 82 343
and your qq has grown to a hundred and two thousand four hundred and forty nine dollars
right here we are on excel comparing vti to qqq now what i'm gonna do is we're gonna plug in our
total balance and right here it is at vti of 82 343 and that's what we're going to live on
assuming a 10 annual growth rate now why do we assume a 10 annual growth rate because as you
look back on the history of the stock market understanding the lows and the highs of the
stock market it has grown at an average of 10 per year which is what we want to kind of assume
for the future now if you don't do anything and you don't withdraw any money at all your balance
of 82 000 and you don't invest anything more would grow to a total of 222 000 10 years from now
that's pretty darn good considering the fact that you're not actually doing anything with the fund
same thing with qqq if we come over here and then what we're going to do is we're going to plug in
the balance of 102 449 assuming a 10 annual growth rate not withdrawing anything your balance will
grow to an awesome 277 000 in 10 years now you have to decide for yourself and that's where the
numbers can be very very interesting there's a couple things you could do now first thing is is
how much money do you need to live comfortably in retirement and that only you can decide
if you can scrimp and save a lot of money maybe your expenses are only like two thousand dollars a
month that probably assumes the fact that you have no debt at all you paid off your house and you're
kind of living practically for free so you only need two thousand dollars a month to maybe enjoy
netflix some groceries and some other things in your life but you don't need to go crazy so
if we withdraw two thousand dollars every single month you would have this balance to live off of
all the way through until november 2026 as you can see it starts going into the negative based on
your growth so in november 2026 that's it you can no longer withdraw on your overall balance because
you run out of money that gives you about four years to live in retirement on two thousand
dollars a month but then you got qqq over here let's say the same thing you're gonna start
withdrawing two thousand dollars a month so now you're one hundred and two thousand dollar balance
because qqq tracks the nasdaq 100 it's a little bit more of an aggressive fun vti attracts a total
stock market a little bit more of a conservative fund but look at this this one will last you until
2028. now you might be asking yourself well if this is the case i'm screwed because in retirement
i'm gonna need a lot more money in that especially if you want to retire early let's say you're only
uh you know 20 years old and you want to retire by the age of 40. or let's say you're 40 years
old and you're like yeah i want to retire before like i'm like really old you got to get to work
because if you don't considering a 10 annual growth rate you don't have a lot of money to
live off of considering only 2 000 a month taken out now if we reduce that annual growth rate to 5
it's even worse you run out of money in june of 2026. that doesn't give you a whole lot
of time to enjoy your happy golden years does it so even though we see that vti does have a
little bit lower threshold than qqq you do got to remember that qqq is a much more aggressive fun
tracking the top 100 companies represented in the nasdaq and there's tend to be technology companies
but the beautiful thing about an etf though is that it does self-cleanse well what the hell
does self-cleanse mean well that means that if you have a hundred companies in the nasdaq and
one of those companies starts underperforming and falls off of the nasdaq 100 index it would
be replaced by a company that now is successful enough to be listed in the nasdaq 100 so let's
say all of a sudden apple decides to not be the best company that it is right now and all of a
sudden you have a new thing banana yes the banana phone company they decide to overtake the market
and everybody's investing in banana and banana becomes the number one technology company in the
world and apple is gonna drop off the nasdaq 100 index and your money would then be invested into
banana stock because banana stock now represents the stronger version of the nasdaq 100 but that's
the beauty of qqq versus individual stock picks if you would have individually invested in apple
and apple went down you're screwed you're going down with the ship but because you're invested
into an etf you kind of have a little bit more of a safe haven but what if you need a little bit
more money well let's go back to my other example there's a couple things we can do now if you're
20 years old and you're watching this video please dear god figure something out because if i was 20
and i was watching this video i would come out and smack myself in the face and say wake up and get
yourself to invest in figuring out a way to invest money so let's say 20 years ago in the year 2000
we decided to do this now of course we're looking at the past to predict the future which isn't a
good idea because you never know what the future brings you can just know that the past did what it
did right that's all we have at our fingertips but if i would have invested 500 a month from 2000 to
2022 in both of these funds let's see how it looks you can see it starts in june of 2001 because
that's actually when vti and qqq were available to be both invested in but look at this my balance
now grows in overall vti to 525 000 what a huge difference and then over here to 896 000 in the
case of qqq another huge difference let's go back to what we originally had well look at this vti
if we only did it for the short period of time that we did we'd only have 82 000 but because
we started when we were young at the age of 42 now because we started when we were 20
22 years later you know the math it's now 42 years old we now have a balance of 525 300
this is gonna make a huge difference look over here at qqq we now have a balance of eight hundred
ninety six thousand o thirty five we're going to continue to assume a ten percent annual growth
rate and then we're going to assume that you can live off of two thousand dollars a month if you
can look what freaking happens at the 10 annual growth rate you don't run out of money at all here
we are 10 years later you don't put any more money into either one of these funds you start pulling
out 2 000 every single month and look what you end up with 10 years from now you end up with 2
million dollars despite the fact that you've been pulling money out two million dollars what yes
because every month your balance is assuming a 10 annual growth rate right here on qqq you have
896 000 that you build up over the last 20 years of being smart and putting 500 a month into this
fund and because you're only withdrawing 2000 but you're growing at a higher rate than what you're
withdrawing holy crap your money is making money while you're using your money can somebody just
smack me right now like seriously but just because we didn't do this in the year 2000
doesn't mean we can't start today the best day to start anything great is today right now
right now and you can actually do that by getting yourself free stocks on weevil linked down in the
description below shameless plug but look at this so even if you decided i need because you know
i'm me and i'm awesome like that i need a little bit more than 2000 a month let's say you're going
gonna live off of four thousand dollars a month so you're gonna double the amount of money you
need every single month to live off of in your golden years or if you're smart in your 42 year
you know 42 years old man if i would have done this i at 42 years old i'd be here damn it well
anyway so look at this so you're gonna live off of four thousand dollars every single month now
you're you're eating up a little bit more of your growth on vti right you grew by four thousand
three hundred and seventy seven you're pulling out four thousand so you're only adding three
hundred and seventy seven dollars and 50 cents to your portfolio and then that will compound as we
go on so let's see what happens here on the four thousand dollar example well you actually will end
up with six hundred and two thousand in ten years you don't run out of money you don't actually run
out of money but you don't have as much money as you did originally with the one million dollars
let's take a look over here at qqq so if we're gonna do another four thousand dollars every month
because qqq is a strong grower and you built yourself up to an 896 000 balance assuming an
annual growth rate of only 10 percent knowing that qqq could be higher than 10 percent we're doing 10
because that's the average return of the overall stock market look at what happens your 896 000
grows to a total of 1.6 million dollars 10 years from now this is the math guys this is why people
in finance are such nerdy freaks when it comes down to this and you're like who are you and why
are you so weird because of this because of this kind of stuff that instead of going out to the bar
every friday night instead of buying fancy cars that cost you a lot of money every single month
you do this instead you put your head down and you say for the next 22 years i'm just gonna do
500 a month i don't give a crap what's happening in the stock market up down sideways inside down
upside down 500 bucks a month and i'm gonna grow to 1.6 million by taking four thousand dollars out
every single month now for you negative people out there we're going to we're going to do two things
negative number one is let's assume i'm 50 wrong so the annual growth percentage right here is
gonna drop to five percent okay we're only going to grow at a rate of five percent on qqq or in vti
which means that in the case of vti withdrawing four thousand dollars a month in ten years you'll
be left with two hundred and forty four thousand in the case of qq you'll be left with 854 thousand
what a difference now look look back here though you started with 896 you end
with only 8.54 you're not losing that much money considering the fact that you're withdrawing
four thousand dollars a month that's if i'm 50 wrong and the average stock market only
grows at a measly five percent i hope this video was helpful i hope it inspired you if
it did give me a like check out this video next and we'll see you on the next video