The first time you make more in a day of gains than you made at work that day.
The first time you make more in a day of gains that you make in a month at work.
The first time your paper losses are more than your month’s salary.
The first time your net worth goes down month-to-month due to market movements.
The first time the 4% rule passes your monthly expenses. To me, that’s the last milestone I care about.
If 8% is $1500 for you, you have $18,750…
If you are 23, retire at 60, you have 37 years until you need this money.
If it grows at 8% per year until then, and you make no more contributions ever you will have $323,355.48.
If you then move all of that to boring dividend paying banks, you can probably bet somewhere around 4% yield.
This would be $12,934 in dividend payments which wouldn’t deplete your capital.
Is that a better feeling?
Edit to add: if you keep contributing the $6000 every year until then you will have $1.5M. Taking 4% dividends on that number is $60,000 per year in dividends. $5000 per month, $166 per day. And that’s not even dipping into the capital!
Investing is a long game my friend. You’ve started at a great age but don’t expect 100% returns. Keep investing, keep dollar cost averaging, and the stay the course. Personally I didn’t start to ‘feel’ like I was making a dent until about 10 years of investing. That’s when my salary doubled and I maintained a similar cost of living while being able to save/invest around 40% of my earnings. Just keep at it.
Roth is a great starting point but it’s only one vehicle. I’d explore 401k contributions if that’s an option or simply invest in long term funds like VTI.
Best of luck
It’s frustratingly slow and at your age it takes an appreciable chunk away from your spending cash.
But those contributions are worth far more today than they will be in 2032. It’s a very long game that compounds every year and results in you both being rich and retiring when you want to.
Dude, you’re doing awesome. You’re a student who is not only not in debt, but actually investing already. By the time you get into your career, your investing habits will really pay off. The intuitive feeling of despair you seem to be feeling is an accurate reflection of the reality that you need more income to develop a proper savings.
But take some BIG solace in the fact that income is only half the story: the other half is having the mindset to live below your means, so that you can invest a high % of disposable income. This trait is MUCH rarer than you realize it is. Rest assured, it will eventually pay big dividends (pun intended).