Nonetheless, over the long haul, there is quite a difference in results at retirement age between the two. The individual who has put $10,000 into option one at age 36, then retires at age 66, thirty years later, and has gained a real annual return of 1.5% after all costs, will end up with $15,631.
Meanwhile his more risk tolerant neighbor who invests $10,000 at age 36 in good no load stock mutual funds may typically end up, after inflation and all costs, with $66,144.
While the figures are just for illustration, one can see that for someone with a longer time horizon and able to weather such financial storms as periodically affect the markets, the second choice goes a lot further toward one's retirement needs. Multiply that $10,000 by 10-20 over the course of a work career and begin even earlier, and the nest egg could, even with real annual gains averaging just 6-7%, grow into a substantial cushion (in the millions) against retirement expenses, in addition to one's Social Security and any employer benefits.