Quote:
Originally Posted by xNYer
What does that mean...9.9%? Annually?
Jan1, 1988. 250.5
Today. 2443.25
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Rule of 72-You take the rate of return divide it into 72 and it will give you the years for money to double. 72 div 9.9%=7.27
So 2017-1987=30 years div 7.27=4.12x to double
250.5x2=501 501x2=1002 1002x2=2004 2004x2=4008
There is nothing so powerful as the magic of compounding.
Life is a limiting factor and the slow bleed sometimes called taxes. In such things as college funds, they live forever and compound forever. Oh and they are free of taxes.
Inflation also compounds. The fed says they want 2% inflation. What they are saying is that in 36 years assuming we are still alive you will need twice as many dollars to buy what it does today. NO GOVERNMENT IN HISTORY HAS BEEN ABLE TO CONTROL INFLATION TO THE LEVEL THE FED IS FEEDING US. The best shell game re: inflation was reagan. He controlled inflation by removing the two items suffering the most inflation at the time from the number-fuel and housing.