The usual 7% long term figure for the S&P500 includes crashes and inflation in that number. You don't crash at 30% and then grow back at 7%. You grow at 7% on average at all times.

The only difference is volatility. If you need to cash out after the 30% crash, you lost a lot of money. Most long term portfolios reposition themselves towards less profitable but less volatile assets towards the end of their expected lifetime.

For an example you can look at the Vanguard "target retirement $DATE" indexes.

8% CAGR is a fairly conservative CAGR for a broad-based stock investments (with dividends reinvested). It is not the typical growth in an "up year". It is the cumulative annual growth rate of up and down years. Said more clearly, you don't make up the down 10-30% at 8% per year; you make them up at up 10-20% per year during bull markets.

If you're shooting for a 8% CAGR over a 7+ year period, no need to play stuntman, just buy a low-fee broad-based stock fund (VTSAX, VFIAX, etc) and resist the urge to panic and pull the money out during down markets.

The 8-10% returns are the long term average, after all crashes are accounted for. You don't have to be a stuntman to attain those numbers. Literally all you have to do is put your money into an index fund and sit on it for 20+ years

>If your shooting for an 8% avg return. You're a stuntman in real life.

Over a period of 30 years, a 7% inflation adjusted gain is "easy" (as in "do no work"). Without adjusting for inflation, I'm sure that exceeds 8%.

http://blog.nawaz.org/posts/2015/Dec/pay-down-mortgage-or-in...

Yeah, my parents got in trouble with this cause they had to sell their investments at a loss to live on. This is why I plan on keeping a significant amount of cash on hand (don't want to ever have to sell at a loss).