If you ever read the Malcolm Gladwell book Outliers, then you know that some people were just born at the right place at the right time. The one example that sticks in my mind was Bill Gates, who was born to a family that was pretty well off where he could attend private school, which had a connection with the University of Washington, which allowed him access to their mainframe computers, and when he didn’t have access he ‘cracked the code” and would routinely sneak out of his room in the middle of night just to code. And lucky for him, he was born at the time when the computer age was going to take off.
All of that came to mind when I started to look at my 401(k) and wondered if I entered the workforce a few years earlier or later, would I be better off?
I started my first job out of college (well, out of Abilene) on October 18, 1999. If I use the Dow as a measure of market performance for a my 401(k), my rate of return would be 6.54%.
If I would have started the workforce four years earlier in 1995, my rate of return would have been 122.68% – and increase of 116.14%.
Yup, I totally missed out on that nice dot-com bubble, but how would things be if I started working four years later, in Oct 2003? Well, it turns out my rate of return would have been 10.34%, which is 3.8% higher than my current rate of return – nothing great, but definitely better.
You can’t help when you are born, you can just try to play with the cards you are dealt, but sometimes it’s fun and interesting to take a look at such things.