Other than a tenuous link to my previous video on compounding, the only reason that I am showing this video is because of this guy’s uncanny similarity to a famous physicist, Julius Sumner Miller, who graced our television screens with his quirky mix of science and entertainment when I was still growing up [AJC: yes, we did have televisions, even when I was a child 🙂 ] …
… not the only reason, because this video also shows you the power of the rule of 70.
Before you get too excited with the power of compounding, just remember that each doubling (at the 7% compounding rate that he is talking about) takes approx. 10 years:
– in 40 years, you double your money 4 times; so if you start with $100k, you end up with $1.6 million,
– if inflation runs at 4%, this also means your $1.6 million is only ‘worth’ (because this causes your money’s value to halve every 70 / 4 = 17.5 years) a bit less than $400k
… sorry, but when you’re working in 10 year chunks, time really begins to get the best of a single human being’s working life 😉
PS the very first computer program that I ever wrote – on paper tape, with holes punched in it – was to calculate the grain of rice-on-chessboard story that is mentioned here 🙂
PPS I know of this rule as the Rule of 72 … perhaps 70 is easier to remember? In any event, it makes not a great deal of difference over a decade …
That’s the problem with most retirement plans. I figure I’ll be lucky to still want to be able to do the things I want to do now if I can make it to retirement. That’s why I, and everyone else, would like to have a 7million7year plan of my own. Right now it’s betting on the lottery.
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