# real interest can only be about 3%, on passive stuff



## srlip (May 7, 2014)

averaged over decades, after you remove inflation, that is. and you'll lose  1/3rd of that to taxes (and 15% to SS, if you don't know to invest as a corporation) any other gains are speculative, only, and thus, very dangerous.


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## SteadyMercury (May 19, 2014)

srlip said:


> and you'll lose  1/3rd of that to taxes


Not true, everyone's tax situation is different.


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## jwoodie (Jun 19, 2014)

SteadyMercury said:


> srlip said:
> 
> 
> > and you'll lose  1/3rd of that to taxes
> ...



Obviously a generalization (duh).  The only correction is that interest income is not subject to SS taxes.


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## Picaro (Jun 20, 2014)

srlip said:


> averaged over decades, after you remove inflation, that is. and you'll lose  1/3rd of that to taxes (and 15% to SS, if you don't know to invest as a corporation) any other gains are speculative, only, and thus, very dangerous.



Depends on how you calculate inflation, and whether you buy the 'official' numbers. Personally I consider them to be junk, and the fact that the banks in Japan and Europe use their own calculations instead of the 'official' numbers put out by the U.S. govt. to plan their strategies means I'm in good company.

I'll add that how much inflation affects your income and returns depends more on your personal financial situation. For instance, 3% inflation in food prices and other necessities on an income of $20,000 a year is far more serious than  for someone with an income of $1,000,000 a year; the latter wouldn't even notice such an inflation rate on their spending, as it would be far less a percentage of their necessary spending. 

Low income people need a far higher interest return than the wealthy do just to break even. A 2% return on $10 million versus a 3% return on $20K isn't comparable in real terms. 3% on $20K won't even pay your electric for a couple of months where I live, while 2% on $10 mil will pay it for a long while.


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## fiza200 (Jul 1, 2014)

It is the lowest rate of interest.


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