That doesn't take into account inflation. Presuming you do keep paying $350/month and not increasing that with inflation, that gives you $1,229,998.43 for 40 years.
If you apply the same U.S inflation rate as seen from 1965 > 2015 to cover a 40 year period, that gives you a cumulative inflation rate of -86.7%, leaving you with the equivalent value in todays money of $163,249.36
You might be a millionaire in 40 years, but you're not going to be rich..
Inflation 1926-2014 was 2.93% annualized
Inflation 1970-2014 was 4.15% annualized
Via IA-SBBI in Morningstar.
You are correct that inflation plays a big role, it always has, it always will. One argument for equites is in their ability to digest inflation (raising prices and returning ever higher earnings). There are many choices here, some simple (S&P500) and some more advanced. End of the day, if you are not making a return ahead of inflation, you are falling behind.
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8% is very generous, I thought 7% was the commonly used figure which gets you 800k in 40 years. When you acount for inflation that is not anything you should consider retiring on.
I can't believe people on a forum such as this are completely financially illiterate. The 7% rate is already inflation adjusted. The nominal rate is about 10%. So plug in a 7% real return. The result will be in 2015 dollars.
If you apply the same U.S inflation rate as seen from 1965 > 2015 to cover a 40 year period, that gives you a cumulative inflation rate of -86.7%, leaving you with the equivalent value in todays money of $163,249.36
You might be a millionaire in 40 years, but you're not going to be rich..