BigBooper
Member
Only thing I'd say is I personally wouldn't consider index funds as yearly income. They are long term slow growth safer investments. There's many ways to go though, if this is what you're comfortable with, it's better than sitting in a bank.I've been seriously considering getting into the stock market, basically my day job isn't enough to support me and I need to increase my yearly income. I don't think I have the stomach to invest in individual companies because I'd be glued to my computer looking at updates every chance I could but I was thinking about getting into index funds.
I looked up the history of the annual return for the SP 500 and its averaging over 10% and it got me thinking, if I put 100k in that I increase my yearly income by 10k. Is this a naïve way of thinking about this? I know some years are worse than others, but it seems to be very very rare that it actually goes down so it looks like a safe investment.
I also looked up the graph showing the value of multiple index funds over time and they have been increasing at an insane rate the past couple years (excluding the covid dip), way more than they used to as far as I can tell. SP500 went from under $3000 to over $4000 in less than 2 years, that seems like an insane increase in such a short time. This has me worried that a drop is inevitable.
Are these as safe as they look like on paper and should I be worried about this recent increase? If I get in now it seems like I'm buying high. I'm trying to do as much research as I can but advice from people that actually do this daily is appreciated.