What happened to the "conservative" hypothesis, commonplace only a few years ago, that one could plan on making 10% (or more) per annum on one's money when saving for retirement or other long-range goals?

The societal pot of wealth isn't growing that fast; it never has, except perhaps during short periods of rebound from tragedy. People on the average can't produce that much more every year than they did the year before. They don't work that much harder, or for that many more hours. Technology doesn't leap that fast, not for things that are of fundamental importance to the economy. New discoveries of exploitable natural resources aren't happening at that rate either. A 10% annual increase means a 7-year doubling time. That's a cancerous rate, not a sustainable one.

So let's accept reality: a normal rate of human productivity growth is at most a few percent yearly. Why then should any individual think that s/he's going to do so much better than the average to be able to earn 10%? A few rationales come to mind:

• I'm smarter than almost everybody and will do better than they do
• I can identify somebody else who is smarter than almost everybody and then let that person invest for me
• The world has changed and everybody is suddenly going to be more productive than ever before

Alas, none of these are likely!

(see also TheCancerIdeology (19 May 1999), JustTheJob (4 Dec 1999), FoodNet (9 Jun 2000), RailWeb (3 Jan 2001), PopGoes (19 Jun 2001) & HopefulRejoinders (23 Jun 2001), ArtNewspaper (4 Aug 2001), LoomingDisaster (6 Aug 2001), DowTheory (27 Jul 2002), ... )

TopicSociety - TopicScience - TopicEconomics - 2004-04-17

A 10% annual increase means a 7-year doubling time. That's a cancerous rate, not a sustainable one. ... let's accept reality: a normal rate of human productivity growth is at most a few percent yearly. You may be right. But I fail to see what the essential difference is between
* a 10% annual increase (a 7.3 year doubling time) * a 2% annual increase (a 35 year doubling time) * a 1% annual increase (a 70 year doubling time) While it is likely that "unlimited exponential growth is impossible", that fact should apply to all 3 of them (since all of them are technically "exponential growth", also known as "constant doubling time"). – David Cary

I don't think we're in any disagreement (see SteadyStateEconomy) on the long-term ... but how about the next few decades? A few percent annual growth isn't implausible, but dot-com-era increases don't seem very likely to me ... — ^z = MarkZimmermann
— (correlates: BubbleBusters, DowTheory, TheCancerIdeology, ...)