If you were to go all the way back to 1928 and dissect the S&P 500 into rolling twenty-year periods, there would be fifty-nine of them (1928-1947, 1929-1948, etc.). The average annual rate of return over those periods was approximately 12 percent. At that rate, your money doubles every six years. (Remember the “rule of seventy-two” from Economics 101, which teaches that a rate of return divided into seventy-two reveals how many years it will take for your money to double.) Over that “median” twenty-year period, a $100,000 investment grew to $948,542! The best twenty-year period occurred from 1980-1999, when investors earned an eye-popping 17.83 percent per year on their money. During that fortuitous twenty-year span, your $100,000 investment (including dividends reinvested)

Source: Thomson Financial

grew to a whopping $2,660,912. No wonder investor Warren Buffett once said the best time to sell stock is never.

The worst twenty-year period for stocks occurred from 1929 to 1948 -- no surprise as it included the Crash of '29, the Great Depression, and World War II. Average annual return during that period was 3.09 percent. ($100,000 grew to $183,000.) Here's an overview of the results from those periods:

• Two twenty-year periods doubled your money.
• Five tripled it, seven quadrupled it, and two quintupled it.
• In two periods, your $100,000 grew to more than$600,000.
• In two more, it grew to more than $700,000.
• Five periods saw growth to more than $800,000, and five grew to more than $900,000.
• In twenty-eight of the rolling twenty-year periods (47 percent of the time), $100,000 grew to more than $1 million: a tenfold increase in twenty years. And in four of those periods, you'd have more than $2 million.
• In none of the twenty-year periods would you have lost money.


For more Retirement Planning, check out AOL Money and Finance.

Printable Version (Adobe ® Reader ® Required)

The foregoing is excerpted from 'Two for the Money: The Sensible Plan for Making it All Work' by Jonathan and David Murray with Max Alexander (Avalon Publishing Group; May 2006)