Peter Thornhill has been preaching the Gospel of Australian Index Shares for more than 30 years now, and the message has been unwavering.
Shares in the Australian Index are the safest form of investment one can make.
With many people scared of shares after prices plummeted during the Global Financial Crisis in 2007, Thornhill has been quoted as saying he would relish another GFC, regretting not going ‘hard enough’ when prices were down.
And here’s why:
The above graph is a case study between two people who invested $100,000 each in 1979. Person A (Yellow) invested $100,000 in an Index Fund, and Person B (Red) invested $100,000 into Term Deposits.
As demonstrated above Term Deposits were doing well in the 80’s when interest rates were high, but have remained steadily low since. The best Person B can hope for is a fully taxable 3%, or in his case $3,000 a year.
On the other hand, Person A’s dividends from investing in the share market are paying $75,000 a year, and the share portfolio is now worth $1.7 million.
Evidently, the graph demonstrates during the GFC the significant drop in both dividends and capital value, but even at it’s lowest point in 5 years, the returns generated from the share market still outweigh that of a Term Deposit nearly nine-fold.
Thornhill’s theory is all about making your money work for you, without having to do any work yourself. What’s so hard about that?
In simple, easy to understand and relatable terms, Thornhill will aggressively challenge your thoughts and explain why people’s impatient behaviour affects their generation of wealth.
Come for a nugget of information, stay for the gold mine of knowledge.
Please note: The advice in this article is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.