Thanks for the insight, a question related to inflation: what do you think is the reason for the different effects of inflations on the other markets Aside stocks?… are we ever going to see as much bull run after the crash?? Or are we headed for ground 0
It is true that US-Stock Market has had its longest bull run in history, so mass hysteria and panic are recognizable as we are not used to such troubled markets, but as you said there are roads lurking if you know where to look. I earned over $850k in the past 10 months and it wasn't rocket science I applied, I just knew I needed a solid and reliable technique to better navigate these times, so I hired a portfolio advisor.
@@inlovewithmycorgie impressive, my portfolio have been tanking all year, tried learning new strategies to gain in the current market but all of that flew right over head, please would you mind recommending the adviser you're using?
@@msarah6028 Kimberly Jean Heavner is the coach that guides me, you probably might've come across her before, she's quite known in her field, search her.
I appreciate your advice. Your Advisor was easy to find. Prior to writing her, I completed my research on her. Her résumé suggests that she is knowledgeable.
Despite the fact that I have a fairly focused portfolio, occasionally adding a tiny new position can be beneficial. It isn't done to diversify. Focusing on something new is a useful diversion from obsessively overanalyzing what you currently have. It gives you and your portfolio some breathing room.
I have $355k in a well diversified portfolio in stock and digital assets which has grown by 3x in the past 7 months with compounding, venturing doesn’t necessarily boil down to funds but you also have to be informed, be patient and back it up with good guidance.
@@Americanpatriot723 Even the most successful investors experience losses when the market is weak or when they make choices that don't work out as planned. However, overall investment ought to significantly improve your net worth; because mine wasn't, I had to work with "LISA ELLEN SHAW" who clarified my mistakes and enabled me to make clear progress.
Great and educational, thanks. I started investing two years ago at age 50. However, I read that Buffet made 94 % of his fortune after he turned 60, so its never too late. AND more important - starting up small portfolios for my kids (11, 14, 17, 19), to ensure they get the chance to make wiser long term financial decisions than I did.
The line between bold and reckless can be thin. I realized that Investing in the market is one of the the best ways to grow our money and beat inflation over a long time horizon although some knowledge is required it's probably less than we think
@@saulgoodman_98 Wondering why smart investors are still in ETFs? Maybe they should listen to their brokers who are paid transaction fees and don't pay taxes? Ya think?
Financial advisory seems like a great idea these days, by generating wealth and generating envy. Perhaps they go hand in hand; wanting to surpass your peers can be the fuel of hard work. But life isn't any fun without a sense of enough. Happiness as it's said, is just results minus expectations
@Yagoub Musa You are incorrect! If there is future cash flow it is ALWAYS worth something , even upfront. How about this: I will give you a $1000 right now and you pay me $100 a month the rest of your life….Deal? Put as many zeros behind the deal and I will gamble you live 10 more months😂
At the very least, I now grasp the concept of leverage. Creating wealth and financial freedom isn't as tough as many people believe. Building wealth and remaining financially stable indefinitely is a lot easier with the appropriate information. Participating in financial programs and products is the only true approach to make a high income and remain affluent indefinitely.
Starting early is simply the best way of getting ahead to build wealth , investing remains a priority . I learnt from my last year's experience , I am able to build a suitable life because I invested early ahead this time .
I totally agree; I am 66 years old, recently retired, with approximately $1.2 million in external retirement funds. I am debt free and have very little money in retirement funds compared to the total value of my portfolio over the past three years. To be honest, I didn't do all this alone, but with the help of a financial advisor. Having one is currently the best way to trade in the stock market, especially for people nearing retirement.
Thanks for sharing. I curiously searched for her full name and her website popped up after scrolling a bit. I looked through her credentials and did my due diligence before contacting her. Once again many thanks.
It's strange how people talk about all the profits, they've been making through trading of bitcoin, while am here making huge loses. Please can Someone put me through on the right path or at least advise me on what strategy to follow.
Wow...Amazing to see another investor who trades with Mrs Mary Harris. I am currently on my 5th trade with her and my portfolio has grown tremendously.
I feel very fortunate. My father taught me about interest and before I was a teen I was calculating how much I needed in the bank to live on the interest (the days of 5.25% passbook savings). Then he taught me the Rule of 72 to estimate doubling my money. A few years later I learned the math behind that approximation, but the ease of dividing into 72 has stuck with me. The one related thing he did not teach me was investing in the stock market. I left home with the understanding, "the stock market is for money you are okay to lose" and I had to figure the rest out for myself.
This is fantastically helpful and illustrative. I hope you’ll do a lot more videos in this vein, showing what happens depending on how much you invest, how early, and what happens when you keep adding money as you age, how to work it if you start later in life, etc. But,doing it in such a way that you show the comparative numbers and charts the way you do here. :)
Hi Nathan - This is so important for people with small children and might make a good standalone video: teach them how to invest properly, and setup a small portfolio for them if you can afford it. For example, in Canada there is the Registered Education Savings Plan, which you can contribute to until a child is College-Age. The government gives you a 20% topup grant, all gains are tax free, and if you're under a certain income threshold the government gives additional grants. In other words, even if you're working poor, you can teach your children to save and invest, and set them up early -- in the RESP model the child gets taxed when they pull it out in College, but most students pay little or no taxes, and if they are dilligent they can reinvest say half back into their own adult registered plan, so in effect they can be using the rule of 72 from as early as the age of 0! This is so important, because inter-generational wealth transfer is one of the ways that families can improve their standard of living and reduce poverty long-term.
Rule #2 hit me harder. When he said, “Don’t loan, own.” Im thinking about my time. I shouldn’t loan my time to corporate. I should own my time working in a business that’s mine. I’m in charge of my rate of return based on the services I provide and what I’m able to charge.
There is nothing wrong with working for a company. Afterall, wouldn't you want people to work for your company? Being compensated for your time isn't an issue. The real issue is scalability. When you work for a business you are already providing a service and charging a rate. The business is your customer. If you want to charge a higher rate and the business doesn't want to pay it, then move to a different job that pays the rate you want. If you can't find one that pays your rate then the demand for your services is likely too low. Starting a business is the same, some being more scalable than others. If your business can scale then you can make more for your time, but you'll still have to deal with supply and demand.
Getting rich off crypto is much tougher than it seems. I keep losing money while trading with these youtub videos, and finding a trustworthy professional trader to help out with these trades also appears to be nearly impossible. This is extremely annoying
Currently real estate prices aren’t high because they have been driven up by irresponsible speculation. As was often the case in the past. Prices have risen because a constantly increasing population with money to invest has been created - and continues to be created.
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@Christopher Daley Not too many 8 year olds have 10 grand. Not many 30 year olds have 10 grand to spare. There is no investment that will guarantee you 9% a year for 80 years. Factor in 80 years of inflation and the 10 million gets very small. Think what a car or gallon of milk cost 80 years ago, say in 1942. For example it costs 5 cents to go to the movies in 1942. Have to do ALL the math.
This is great advice for people who want to invest some money and let it grow so their grandkids will have a nice chunk of money. Considering most people don’t live to 88 and you really can’t touch the money while you’re alive
When I was younger, I didn't understand the meaning of "the second million dollars is easier than the first" till I started calculating out my retirements investing plan over time. Yup, rule of 72 is simple math, but very powerful in motivating you into saving. Just wish I didn't just understand it, but applied it more when I was younger..... :D
You can also use the accurate formula which is log(2) / log(1 + x), where x is the return. So if you expect a 10% return, log(2) / log(1 + 0.1) = 7.27. You can change 2 for other numbers to know how long it would take to multiply your money by that number. So for 3x your money at 10% return, it's log(3) / log(1 + 0.1) = 11.52
The compounding effect is really a superb phenomenon, but the examples from this video does not help very much. I don’t think that the goal of anyone trying to invest, is to have as much money as possible at the end of his/her life, but rather to have the necessary amount of money in order to have a happy and fulfilling life.
I think the idea of this video is to encourage people to start investing as early as possible, regardless whether the goal is to have as much money as possible at retirement or as you said, to have sufficient amount of money for a happy and fulfilling life.
It is the same process, just a different end time. If you need $1,000,000 when you turn 65, and you get a 7% rate of return, you know that 72/7 is a doubling every 10 years. So you know if you are 35 and you have $200,000 invested, you have 30 years or 3 doublings, and you should have $1,600,000 at age 65. That means you are ahead of your goal. Yay! But if you are 35 and have only $100,000 invested, you know you need to invest more to get caught up, or you will end up with only $800,000.
For anyone who wants to know "why 72?" the answer is 69 (point 3). If you have any amount and wish to double it at 1% per period of time, your amount will have doubled from your starting amount after 69.3 periods of doubling (natural log 2). The rule is 72 because though marginally less accurate it is easier to calculate in your head and approximates well.
A little depressing though that even at a very very good average return of about 9% we will only be 64+ when we get a decent portfolio size... likely only have a couple years 10-15 to use it before passing away xD A bit morbid but hey. Additionally it would be interesting to factor in inflation correction to this return rate to get "real value of money" for the portfolio when we are 80. At the current 10% inflation rate a 9% return is -1% growth in real world money...
Inflation affects all investments, so you'll need to outpace it if you want ro stay ahead. Here's the thing. Unless you inherited a lot of money, there is really one way to amass great wealth before reaching retirement age. That way is to make more money. Whether it's a job or your own business, we have to bring in more money.
@@TheFirstRealChewy People with fiance channels never talk about outpacing expenses being one of the most important factors. What percentage of the population already can afford 1K each year loss without issue? Then think about how many have 10K they can loose without issue..........
It will "change your life" IF you do it early enough. The most important message you could send would be to young people in their '30's to set up 401K's with those kinds of returns very early in their post-college careers...and continue investing through thick and thin (the most money I ever made was from the things I invested in 2008-09)...and forget it...don't take out loans against it. Make sure the asset allocation produces that desired average 7.2%+ return...then forget it. Invest early and live well late...it's the ultimate deferred gratification.
The one thing I had to get over when it comes to investing is that it takes time, and the market will move. Just keep investing, learn more and losses will happen, but gains will also occur. I had to get used to losses.
Great, digestible content! Question, does the logic hold true that if you started investing with $160k at 40 (9%) you will still end up at $10.2 million at 88?
Does the rule of 72 work if you are losing money? i.e. if you are losing money at a given rate, can your holding be halved in value in a certain amount of time?
I will be forever be indebted to you, you have changed my entire life and I continue to preach on your behalf for the whole world to hear that with just a small investment you saved me from going into huge financial debt. Thank you Mrs Aubrey Richardson.
The problem is the money made of substance is in later life years when mobility and health has a high chance of being decreased. Additionally 10 million 80 years from now is not worth 10 million in todays dollars due to inflation. It is worth maybe half that or less. This does not even account for potential taxes on gains. Most of the mass population barely get by with enough money to pay the bills. They barely can save and then a few life events happen that sets them back again to take on non-productive debt. Most consumers want that instant dopamine hit from buy junk trinkets, eating out, vacations, etc. to relieve stress in the moment. So the REAL question becomes how to earn more than you need faster than what you can save. Someone can be a miser making minimum type wages and maybe eventually be a millionaire a ton of decades later OR you can learn how to earn more through career advancement, opening a business, buying real estate right and compounding returns much quicker. Making the first million is very hard. The additional millions tend to be easier because most have more than they need to live comfortably and not stressing as much paying bills. They can focus on what makes them happy in life instead of what they need to do to exist. People that are happy tend to be more creative and productive. Once you make the first million learning to keep and grow it is key. Many make the first million and lose it because once you have money all the hucksters come out pitching their wares. You have to be careful and methodical about how money is invested and grown over time. Likely some mistakes will be made but minimizing those mistakes and hopefully having more winner investments than losers can help lead to overall success with investing.
The chart comparison you used for the thumbnail is the same chart used for the pulsex decentralized exchange sacrifice chart and proposed a similar time fram but greater returns.
So no matter when I'm starting, the key is to invest as much as possible as early as possible so that it can have time to grow. I wish I started before this year. By the time the invested amount starts to really move I'll be well into retirement and would have already needed to use the money.
The rule of 72 arithmetic work places investing in perspective. Most retail investors need this educational display so they can “see it.” An extremely important factor. Too bad TH-cam does not allow forwarding videos via email link!
You haven’t accounted for inflation and the depreciation of money. The rate of return has to on average exceed the rate of inflation. Otherwise the net present value of your assets will fall.
72 is an approximation. The actual formula involves more complex math, but can be simplified and rounded off to arrive at 72 and simple multiplication and division. Search "compound interest formula" to get started.
We should fund Social Security this way. Put $10K in an S&P 500 index fund for every child born in the U.S. to at least one legal U.S. citizen. Make it so that the fund can't be accessed for anything until a certain age, by the recipient only, and for only certain things before a certain age (kind of like a 401K). I've done the math. It would cost 1/3 what we currently spend on S.S. each year, no need for payroll deductions (all that extra money saved each month could be VOLUNTARILY reinvested by each participant) and each recipient would retire at 65 with WAY more money, even without additional contributions.
@Nathan, I think his formula is not that accurate. Let's say I can make 72% per year. According to this formula, I can double my money in "one" year but in fact I can actually make 72% per year. Not 100% per year (to double my money). Am I missing something?
Just an illustration, but agree that $10k a lot for an 8 year old lol I had about $100 then maybe… my first $10k was auto dealing business when I was 16
first of all nobody know if the stock market consistently is going to return 9% only because it did in the past. Second even if we take the 9% for granted, what should i do with 10 million when i am 80 ? to really benefit from exponential growth you would need to become 160 years old, but humans simply run out of years before the money grows rapidly. I do not want to be the richest man on the graveyard.
It would be fun to create a 10,000 account for each of my kids and just put it in a broad based index fund in trust only to be given to them on their 45th birthday or something like that. Let them feel like they hit the lottery in 30 years.
No sure I really understood the relevance of starting at 8 with 10K. But clearly the message is don’t touch anything to do with the government! Rate of returns for me wants to be Monthly not annually. Anything from 4% upwards is worthwhile!
4% is quite unsustainable for the most part. I don't care what companies do as long as the make a good profit but many others want the world so their might always be an issue with those type of people....
The concept is great and all but what really is the point of having 10 million dollars at age 88? For the majority of us, that is going to mean we didn't experience that many things in life while we were younger. Is there some sort of rule that allows you to comfortably enjoy life's experiences while you're growing older while also you're saving to live comfortably in your 80s and 90s?
Too much text to say "compound interests make your income grow exponentially. That is, doubling every X amount of years". You can zoom the 6:54 graph out all you want. Since it is an exponential function it doesn't grow linearly (even for small ages)
Well well , it’s all true and all if we live forever the art of compounding works only when u start with big chunk or u don’t care u wanna be rich at 80 Nothing more nothing less
The way I look at it is that each month millions of workers are investing in the market so there are only so many stocks and issued shares which are diminished by company stock buybacks. So with limited shares and investment demand then stocks will go up. No guarantee that the market at some point or points will decline by 50% or maybe even more.
heres the BIG problem with all these mystical formulas. You'll CONSTANTLY hear that stock market AVERAGES 9.5% return, but this fails to take into account several factors: ONE, fees + taxes, that will knock that 9.5% real fast. TWO, all the businesses that went bankrupt and are NOT calculated into that 9.5% return. The stock market average only averages the successful/surviving businesses. So in reality the problem is not the doubling rule, the problem is finding good investments that return consistently. Finally the biggest problem of all. Yep you can invest at 8 if your parents help, but in reality MOST of the population struggles to get past high school, and fewer and fewer are getting into University...and fewer and fewer of these degrees lead to success (in 1988, a bachelors could yield you a pretty profitable job, I know cause I did it and was making quite a bit with just a bachelor). That world does not exist anymore. Cost of living swallows any net, most people can't save. YES, the upper middle class is still doing ok...the rest: not so much. So whats the solution: only a few. Be born into wealth. Don't have children. Screw people for money. Pretty shallow life. I personally believe instead of investing, people should invest in their own businesses, especiall y ones that get you out of the love of money, and more into improving society. You'll sleep better at night.
This is not true. The S&P 500 includes failed companies. And low cost ETF fees are now 0.03% per year. In an IRA, which most people invest $10k in, will have no taxes. And the 9% is CAGR and NOT an average. Next
That's nice, but most people die before 80. That means, if you start early you'll leave a lot of money for your grandchildren. All you need to do is to leave them precise instructions how to live of the dividends so the money lasts for many generations to come.
Therefore, if ur starting late (say 30s +), and u have a simple little job with 10K on a brokerage account.... unless you hv a side hustle or business to earn exponential income... ur really saving for future generations. You'll be too old to enjoy what you're saving.
@@NathanWinklepleckCFA allow me to model an example for you. When determining the area of a circle we use pi because it is the constant that represents the relationship between the circumference of any circle and its diameter as a ratio 💁🏼♂️
As much as the Math sounds good...lifespan of a human being doesn't always agree to that. Plus, $10M @ 88 years of age, would probably be only worth $500K-1M in the future..hehe. I would be too old to enjoy that money.
Staking on zilliqa at 3 cents offer 15% a yr. That plus the growth of the valuation would work very well. Investing in crypto in an apocalyptic bear market could reduce the beginning time greatly.
I mean that works fairly well, but honestly who wouldn't be able to use the formula FV = P * (1 + r/n)^(n*t) right off the top of their head? lol obviously joking, thanks for sharing. ✌
@@NathanWinklepleckCFA Sorry? I think what I am asking is why can't I use 6 or 105? What makes 72 special? Did you really think I was not being serious?
Day trading and frequent compounding, based upon good fundamentals, will grow $ much faster than 'buy & hold'. If I could only earn 7-10% per year I'd give up and quit. Even earning a meager 1%/week trading just once a week gives back nearly 68% in a year.
@@NathanWinklepleckCFA Well you laugh, but how much percentage are you earning per year? I've been day trading for more than 20 years and like I said, 1% once per week IS 67.7% per annum... it's math. If a trader cannot get a simple 1%/week using technical analysis and fundamentals then they shouldn't quit their other day jobs. Additionally, let's say you're following a price movement uptrend and you get 4% in two days and then jump out... and you risked say $200K... that's better than playing buy and hold and maybe eeking out 10% in a year after 20 market ups and downs and negative market news. You might get 4% that week on one stock, 2.5% the next on a different stock, 3.1% the next, etc. Starting with $10K at 1% on a repeating M,W,F,T,Th sequence (using technical charts set at 1 sec. to 1 hour intervals) no single individual could trade the proceeds after ten years because the returns would be too large and they'd have to trade such a large basket of stocks. Nobody has that much time. Excluding taxes, the principal would be >$4,147,000,000.00 - which gets back to the very realistic idea that an 18 year old with average intelligence, and lots of years ahead of them, can trade an original $1000 investment earning 0.6% on Monday and 0.6% on Wednesday every week taking advantage of intraday price fluctuations in stock pricing up to age 38 years and quite easily have >$50M after taxes (from the untaxed $253M) with very little work. However, no reasonable person would keep trying to get so much $ if they simply wanted to enjoy their life. After about 9.5 years a trade grosses >$2K, so why not stop trying to get more and just maintain a principal of about $500K and live off the interest of $3K twice a week? If they're experienced, understand business, and keep up on business news and reports their gains will very likely exceed 1%/week. Trading and frequent compounding will beat the Rule of 72 - which is compounding extremely slowly, at a snail's pace, and usually under someone else's control. Furthermore, using the Rule of 72 and 'trying' to get 9%/annum will ultimately get a large chunk of that 9% eaten by inflation... not to mention taxes. Just looking at inflation, at today's CPI would find themselves netting maybe 2%, and 6% under normal 3% annual rates. At the average annual return of just over 8% on the S&P500 minus 3% average CPI, leaving 5% growth, it'd take 70 years to get $32K on a $1K investment starting at age 18 using the Rule of 72... but taxes will slow it down even more.
A weak dollar can signal an economic downturn, making me to ponder on what are the best possible ways to hedge against inflation, and I've overheard people say inflation is a money-eater thus worried about my savings around $200k
The stock market is a way to hedge against inflation. Most notably amidst recession, investors need to understand where and how to allocate funds to hedge against inflation and still make profits.
@@stellaadams593 in my opinion, the impact of the rise or fall of the U.S. dollar on investments is multifaceted but learning how to grow your money has never been easier than now that you can explore and experience a truly diverse marketplace passively by using a well-performing portfolio-advisor.
@@brendazvandasara The stock market is down 20%. Keeping my money in bank could be no good but investing is riskier, I wish to find better value deals as asset prices keep decreasing but lack the skillset, mind if I look up your advisor? I admit this is the only way for amateurs like myself
@@gowonjake I invest with (CLAUDIA TRINIDAD RIVAS) a widely known consultant. You can make a quick internet research with her name mentioned where you can easily get in touch...
Now just a minute, when I was 8 years old $10,000. could buy you a very substantial house. What 8 year old has enough money to buy a house? Secondly I'm mid 60s now, I can live on far less than what I needed in my early 30s when I had several kids to look after. I certainly don't need a million dollars when Im 88. Wealthy people got wealthy by doing something that generated massive profits. They did not invest at 9%.
It's an illustration of the power of compound interest that you can apply to ANY age, to ANY amount of money, to ANY rate of return... my hope is that people can use this for their own use case to motivate them to save starting today.
The historical average return of the stock market is not a guarantee of the future average return of the stock market. You make an assumption that you can earn more in the stock market than outside of it. It might be true, it might not be. But no one can assert it as true when no one knows the future. The Japanese stock market stayed in the doldrums for decades. There is no guarantee that the U.S. stock market won't go the same way, given current fiscal and monetary policy as well as U.S. foreign policy. You're basically advising people here (ignoring the disclaimer which is obviously there so you don't get sued) to ignore risk and just chase returns. It's bad advice.
@@NathanWinklepleckCFA You do so starting at/around the 4:25 mark. You specifically say "don't lend to other people". You say it comes with higher safety to buy Treasuries, but that the compounding effect is "substantially lower", which is only the case if the stock market performs better than Treasuries over some arbitrary period of time. This is not in any way guaranteed. Obviously if the markets drop 25%, you didn't compound anything that year. The constant interruption of compounding from stock market swings vs. the constant compounding from safer investments like Treasuries is also a factor. It's more complicated than just "bigger number better than smaller number". Please don't try to shift the goalposts and say that you didn't clearly imply (in fact, explicitly state) that safer investments with lower returns are worse than riskier investments with higher returns. They each have their merits and everyone has a different risk tolerance. And there are probably better things to do with your money than throwing it into the global economic casino of the stock market anyway, depending on a person's unique, individual set of skills and experience which they can put to work generating income and cash flow.
![How to beat the S&P 500... by doing nothing [1935-2022]](http://i.ytimg.com/vi/EeyxZMR9MRU/mqdefault.jpg)
![How to beat the S&P 500... by doing nothing [1935-2022]](/img/tr.png)
Thanks for the insight, a question related to inflation: what do you think is the reason for the different effects of inflations on the other markets Aside stocks?… are we ever going to see as much bull run after the crash?? Or are we headed for ground 0
It is true that US-Stock Market has had its longest bull run in history, so mass hysteria and panic are recognizable as we are not used to such troubled markets, but as you said there are roads lurking if you know where to look. I earned over $850k in the past 10 months and it wasn't rocket science I applied, I just knew I needed a solid and reliable technique to better navigate these times, so I hired a portfolio advisor.
@@inlovewithmycorgie impressive, my portfolio have been tanking all year, tried learning new strategies to gain in the current market but all of that flew right over head, please would you mind recommending the adviser you're using?
@@msarah6028 Kimberly Jean Heavner is the coach that guides me, you probably might've come across her before, she's quite known in her field, search her.
I agree with you , certainly talkin to a professional is always favourable
I appreciate your advice. Your Advisor was easy to find. Prior to writing her, I completed my research on her. Her résumé suggests that she is knowledgeable.
Despite the fact that I have a fairly focused portfolio, occasionally adding a tiny new position can be beneficial. It isn't done to diversify. Focusing on something new is a useful diversion from obsessively overanalyzing what you currently have. It gives you and your portfolio some breathing room.
The deeper the correction the greater the chances of new positions and hence clarifications.
Absolutely! I have some pennies picked out!
I have $355k in a well diversified portfolio in stock and digital assets which has grown by 3x in the past 7 months with compounding, venturing doesn’t necessarily boil down to funds but you also have to be informed, be patient and back it up with good guidance.
@@84gaynor Wow!!! how are you able to achieve all that given that the market has being a mess most of the year?
@@Americanpatriot723 Even the most successful investors experience losses when the market is weak or when they make choices that don't work out as planned. However, overall investment ought to significantly improve your net worth; because mine wasn't, I had to work with "LISA ELLEN SHAW" who clarified my mistakes and enabled me to make clear progress.
Great and educational, thanks. I started investing two years ago at age 50. However, I read that Buffet made 94 % of his fortune after he turned 60, so its never too late. AND more important - starting up small portfolios for my kids (11, 14, 17, 19), to ensure they get the chance to make wiser long term financial decisions than I did.
The line between bold and reckless can be thin. I realized that Investing in the market is one of the the best ways to grow our money and beat inflation over a long time horizon although some knowledge is required it's probably less than we think
@@saulgoodman_98 Wondering why smart investors are still in ETFs? Maybe they should listen to their brokers who are paid transaction fees and don't pay taxes? Ya think?
Financial advisory seems like a great idea these days, by generating wealth and generating envy. Perhaps they go hand in hand; wanting to surpass your peers can be the fuel of hard work.
But life isn't any fun without a sense of enough. Happiness as it's said, is just results minus expectations
we shall see, this time next year. I'm locking in some good long term fixed income for the future. Either way I win!
Scam
@Yagoub Musa You are incorrect! If there is future cash flow it is ALWAYS worth something , even upfront. How about this: I will give you a $1000 right now and you pay me $100 a month the rest of your life….Deal? Put as many zeros behind the deal and I will gamble you live 10 more months😂
At the very least, I now grasp the concept of leverage. Creating wealth and financial freedom isn't as tough as many people believe. Building wealth and remaining financially stable indefinitely is a lot easier with the appropriate information. Participating in financial programs and products is the only true approach to make a high income and remain affluent indefinitely.
Starting early is simply the best way of getting ahead to build wealth , investing remains a priority . I learnt from my last year's experience , I am able to build a suitable life because I invested early ahead this time .
I totally agree; I am 66 years old, recently retired, with approximately $1.2 million in external retirement funds. I am debt free and have very little money in retirement funds compared to the total value of my portfolio over the past three years. To be honest, I didn't do all this alone, but with the help of a financial advisor. Having one is currently the best way to trade in the stock market, especially for people nearing retirement.
@@ThomasChai05That does make a lot of sense, unlike us, you seem to have the Market figured out. Who is this consultant?
Credits to "Camille Alicia Garcia", she maintains an online presence. Just make a simple search for her name online.
Thanks for sharing. I curiously searched for her full name and her website popped up after scrolling a bit. I looked through her credentials and did my due diligence before contacting her. Once again many thanks.
It's strange how people talk about all the profits, they've been making through trading of bitcoin, while am here making huge loses. Please can Someone put me through on the right path or at least advise me on what strategy to follow.
Wow...Amazing to see another investor who trades with Mrs Mary Harris. I am currently on my 5th trade with her and my portfolio has grown tremendously.
You don't need to be shocked because I'm also a huge beneficiary of expert Mary Harris trading services . I have earned over 4BTC from her strategy.
This is impressive.
I think I need a financial adviser like yours. I have really lost a lot lately and won't want to loss more.
How can I reach her?
I feel very fortunate. My father taught me about interest and before I was a teen I was calculating how much I needed in the bank to live on the interest (the days of 5.25% passbook savings). Then he taught me the Rule of 72 to estimate doubling my money. A few years later I learned the math behind that approximation, but the ease of dividing into 72 has stuck with me. The one related thing he did not teach me was investing in the stock market. I left home with the understanding, "the stock market is for money you are okay to lose" and I had to figure the rest out for myself.
This is fantastically helpful and illustrative. I hope you’ll do a lot more videos in this vein, showing what happens depending on how much you invest, how early, and what happens when you keep adding money as you age, how to work it if you start later in life, etc. But,doing it in such a way that you show the comparative numbers and charts the way you do here. :)
Hi Nathan - This is so important for people with small children and might make a good standalone video: teach them how to invest properly, and setup a small portfolio for them if you can afford it. For example, in Canada there is the Registered Education Savings Plan, which you can contribute to until a child is College-Age. The government gives you a 20% topup grant, all gains are tax free, and if you're under a certain income threshold the government gives additional grants. In other words, even if you're working poor, you can teach your children to save and invest, and set them up early -- in the RESP model the child gets taxed when they pull it out in College, but most students pay little or no taxes, and if they are dilligent they can reinvest say half back into their own adult registered plan, so in effect they can be using the rule of 72 from as early as the age of 0! This is so important, because inter-generational wealth transfer is one of the ways that families can improve their standard of living and reduce poverty long-term.
Rule #2 hit me harder. When he said, “Don’t loan, own.” Im thinking about my time. I shouldn’t loan my time to corporate. I should own my time working in a business that’s mine. I’m in charge of my rate of return based on the services I provide and what I’m able to charge.
Yup. You don’t work for a company, you are a service provider with 1 client right now. Think something closer to that
There is nothing wrong with working for a company. Afterall, wouldn't you want people to work for your company?
Being compensated for your time isn't an issue. The real issue is scalability. When you work for a business you are already providing a service and charging a rate. The business is your customer. If you want to charge a higher rate and the business doesn't want to pay it, then move to a different job that pays the rate you want. If you can't find one that pays your rate then the demand for your services is likely too low. Starting a business is the same, some being more scalable than others. If your business can scale then you can make more for your time, but you'll still have to deal with supply and demand.
@@TheFirstRealChewy I agree with what you're saying and it makes sense.
Getting rich off crypto is much tougher than it seems. I keep losing money while trading with these youtub videos, and finding a trustworthy professional trader to help out with these trades also appears to be nearly impossible. This is extremely annoying
That's true! Most failures in the market system today is as a results of poor orientation and bad experts methods in winning
Real estate has been the best but crypto is better rough for fast wealth growth
That's good to hear
Currently real estate prices aren’t high because they have been driven up by irresponsible speculation. As was often the case in the past. Prices have risen because a constantly increasing population with money to invest has been created - and continues to be created.
Well, I've tried but was so confused with the inflation in price, due to the pointers on how to make substantial progress in earnings?..🙏
Wow!! Very informative! From years of trying to understand compound interest, i can now step by step understand the rule of 72! Many thanks!!!!
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Dividendearner a canadian blog promote this rule of 72 on his blog he claims he doubles his money every 5yr
You’re very welcome! Great video explaining. Start young…stay invested.
The rule of 72 is great! But if you are already 72 the magic of compounding is not very interesting or applicable anymore. Start early.
@Christopher Daley Not too many 8 year olds have 10 grand. Not many 30 year olds have 10 grand to spare. There is no investment that will guarantee you 9% a year for 80 years. Factor in 80 years of inflation and the 10 million gets very small. Think what a car or gallon of milk cost 80 years ago, say in 1942. For example it costs 5 cents to go to the movies in 1942. Have to do ALL the math.
This is great advice for people who want to invest some money and let it grow so their grandkids will have a nice chunk of money. Considering most people don’t live to 88 and you really can’t touch the money while you’re alive
That was a good video Nathan, very well spoken making it easy to listen to.
Rule #3 speaks volume
When I was younger, I didn't understand the meaning of "the second million dollars is easier than the first" till I started calculating out my retirements investing plan over time. Yup, rule of 72 is simple math, but very powerful in motivating you into saving. Just wish I didn't just understand it, but applied it more when I was younger..... :D
Absolutely!!
That last statement might apply to many of us. If parents did not invest the we older folks never got exposed as we should have!
You can also use the accurate formula which is log(2) / log(1 + x), where x is the return. So if you expect a 10% return, log(2) / log(1 + 0.1) = 7.27. You can change 2 for other numbers to know how long it would take to multiply your money by that number. So for 3x your money at 10% return, it's log(3) / log(1 + 0.1) = 11.52
Wow, fancy! You must be a mathematician... ?
@@NathanWinklepleckCFA Thanks haha ! I'm a computer scientist 🙂
@@NathanWinklepleckCFA By the way, I love your videos! I learned a lot about investing and financial from them. So thanks a lot!
The compounding effect is really a superb phenomenon, but the examples from this video does not help very much. I don’t think that the goal of anyone trying to invest, is to have as much money as possible at the end of his/her life, but rather to have the necessary amount of money in order to have a happy and fulfilling life.
I think the idea of this video is to encourage people to start investing as early as possible, regardless whether the goal is to have as much money as possible at retirement or as you said, to have sufficient amount of money for a happy and fulfilling life.
It is the same process, just a different end time. If you need $1,000,000 when you turn 65, and you get a 7% rate of return, you know that 72/7 is a doubling every 10 years. So you know if you are 35 and you have $200,000 invested, you have 30 years or 3 doublings, and you should have $1,600,000 at age 65. That means you are ahead of your goal. Yay! But if you are 35 and have only $100,000 invested, you know you need to invest more to get caught up, or you will end up with only $800,000.
love it ! ... I keep this formula written on the whiteboard with other data in front of my Airdyne
For anyone who wants to know "why 72?" the answer is 69 (point 3).
If you have any amount and wish to double it at 1% per period of time, your amount will have doubled from your starting amount after 69.3 periods of doubling (natural log 2).
The rule is 72 because though marginally less accurate it is easier to calculate in your head and approximates well.
Great video. Really well explained.
And that’s all without adding!
Compounding really is a miracle.
A little depressing though that even at a very very good average return of about 9% we will only be 64+ when we get a decent portfolio size... likely only have a couple years 10-15 to use it before passing away xD A bit morbid but hey. Additionally it would be interesting to factor in inflation correction to this return rate to get "real value of money" for the portfolio when we are 80. At the current 10% inflation rate a 9% return is -1% growth in real world money...
Inflation affects all investments, so you'll need to outpace it if you want ro stay ahead.
Here's the thing. Unless you inherited a lot of money, there is really one way to amass great wealth before reaching retirement age. That way is to make more money. Whether it's a job or your own business, we have to bring in more money.
@@TheFirstRealChewy People with fiance channels never talk about outpacing expenses being one of the most important factors. What percentage of the population already can afford 1K each year loss without issue? Then think about how many have 10K they can loose without issue..........
Thanks for the Continuing Ed classes!
It will "change your life" IF you do it early enough. The most important message you could send would be to young people in their '30's to set up 401K's with those kinds of returns very early in their post-college careers...and continue investing through thick and thin (the most money I ever made was from the things I invested in 2008-09)...and forget it...don't take out loans against it. Make sure the asset allocation produces that desired average 7.2%+ return...then forget it. Invest early and live well late...it's the ultimate deferred gratification.
Excellent explanation.
Glad it was helpful!
The one thing I had to get over when it comes to investing is that it takes time, and the market will move. Just keep investing, learn more and losses will happen, but gains will also occur. I had to get used to losses.
Love you man 👏
Great, digestible content! Question, does the logic hold true that if you started investing with $160k at 40 (9%) you will still end up at $10.2 million at 88?
Great video!
Does the rule of 72 work if you are losing money? i.e. if you are losing money at a given rate, can your holding be halved in value in a certain amount of time?
if you carry over a balance on a credit card the amount you owe will double about every 3.6 years
I will be forever be indebted to you, you have changed my entire life and I continue to preach on your behalf for the whole world to hear that with just a small investment you saved me from going into huge financial debt. Thank you Mrs Aubrey Richardson.
she often interacts on Telegrams, using the user name below
@ExpertAubrey
The problem is the money made of substance is in later life years when mobility and health has a high chance of being decreased. Additionally 10 million 80 years from now is not worth 10 million in todays dollars due to inflation. It is worth maybe half that or less. This does not even account for potential taxes on gains. Most of the mass population barely get by with enough money to pay the bills. They barely can save and then a few life events happen that sets them back again to take on non-productive debt. Most consumers want that instant dopamine hit from buy junk trinkets, eating out, vacations, etc. to relieve stress in the moment. So the REAL question becomes how to earn more than you need faster than what you can save. Someone can be a miser making minimum type wages and maybe eventually be a millionaire a ton of decades later OR you can learn how to earn more through career advancement, opening a business, buying real estate right and compounding returns much quicker. Making the first million is very hard. The additional millions tend to be easier because most have more than they need to live comfortably and not stressing as much paying bills. They can focus on what makes them happy in life instead of what they need to do to exist. People that are happy tend to be more creative and productive. Once you make the first million learning to keep and grow it is key. Many make the first million and lose it because once you have money all the hucksters come out pitching their wares. You have to be careful and methodical about how money is invested and grown over time. Likely some mistakes will be made but minimizing those mistakes and hopefully having more winner investments than losers can help lead to overall success with investing.
$10,000 "pretty small" when 67% of Americans don't even have enough in the bank to cover a $400 emergency fund.
The chart comparison you used for the thumbnail is the same chart used for the pulsex decentralized exchange sacrifice chart and proposed a similar time fram but greater returns.
This video was very educational
So no matter when I'm starting, the key is to invest as much as possible as early as possible so that it can have time to grow. I wish I started before this year. By the time the invested amount starts to really move I'll be well into retirement and would have already needed to use the money.
The rule of 72 arithmetic work places investing in perspective. Most retail investors need this educational display so they can “see it.” An extremely important factor. Too bad TH-cam does not allow forwarding videos via email link!
Thanks, Glen!
Hi, how do you take into account losing years? Isn't 9 %is too ambitious? Or is it just for demo purposes?
How do you make 9% consistently every year?
9% would be the average. You may make 20 or 30% some years, you will also get a negative others.
You haven’t accounted for inflation and the depreciation of money. The rate of return has to on average exceed the rate of inflation. Otherwise the net present value of your assets will fall.
Neat video
This is fantastic. Thanks for sharing! Why is it 72? Where did this simple and powerful formula originate?
72 is an approximation. The actual formula involves more complex math, but can be simplified and rounded off to arrive at 72 and simple multiplication and division. Search "compound interest formula" to get started.
@@Sylvan_dB thanks so much!
I am only recently interested in finance but i know apy apr roi but this rate of return the same as roi?
Great rule 🙏
We should fund Social Security this way. Put $10K in an S&P 500 index fund for every child born in the U.S. to at least one legal U.S. citizen.
Make it so that the fund can't be accessed for anything until a certain age, by the recipient only, and for only certain things before a certain age (kind of like a 401K).
I've done the math. It would cost 1/3 what we currently spend on S.S. each year, no need for payroll deductions (all that extra money saved each month could be VOLUNTARILY reinvested by each participant) and each recipient would retire at 65 with WAY more money, even without additional contributions.
@Nathan, I think his formula is not that accurate. Let's say I can make 72% per year. According to this formula, I can double my money in "one" year but in fact I can actually make 72% per year. Not 100% per year (to double my money). Am I missing something?
Yes, it’s a shortcut so not 100% accurate. Just an approximation that illustrates the main point 👍
@@NathanWinklepleckCFA Thank you!
‘If an 8YO invests $10k, which I think we can agree isnt that much’
Feels like we live in different worlds. Much more realistic an 18YO invests $1000
True!
Just an illustration, but agree that $10k a lot for an 8 year old lol I had about $100 then maybe… my first $10k was auto dealing business when I was 16
Man I'm going to be rich at age 156!
LOL
And who needs all that money at 80 years old?
The concept is what matters, not the numbers.
first of all nobody know if the stock market consistently is going to return 9% only because it did in the past. Second even if we take the 9% for granted, what should i do with 10 million when i am 80 ? to really benefit from exponential growth you would need to become 160 years old, but humans simply run out of years before the money grows rapidly. I do not want to be the richest man on the graveyard.
Where does YOLOing 5% OTM weekly $SPY options come in to play here
It would be fun to create a 10,000 account for each of my kids and just put it in a broad based index fund in trust only to be given to them on their 45th birthday or something like that. Let them feel like they hit the lottery in 30 years.
Well what if everyone makes an account cost would rise so the lottery might have to have bigger payouts if they did.....
Both my boys are watching this one ☝️
Awesome!!! 👏
No sure I really understood the relevance of starting at 8 with 10K.
But clearly the message is don’t touch anything to do with the government!
Rate of returns for me wants to be Monthly not annually. Anything from 4% upwards is worthwhile!
4% is quite unsustainable for the most part. I don't care what companies do as long as the make a good profit but many others want the world so their might always be an issue with those type of people....
3.6% guaranteed yield would be a zero-sum gain after adjusted by REAL Inflation (using original and may I say, correct metrics)
Is a consistent way to get rich in your 80s , I’d say triple that roe to 30% and hopefully u can still spend ur money when u are alive 👍🏻
The concept is great and all but what really is the point of having 10 million dollars at age 88? For the majority of us, that is going to mean we didn't experience that many things in life while we were younger. Is there some sort of rule that allows you to comfortably enjoy life's experiences while you're growing older while also you're saving to live comfortably in your 80s and 90s?
The main point is the math and concept. Don’t get too carried away with the specific end result. :)
@@NathanWinklepleckCFA Well as a CFA why do people come to you? The don't come because they are looking for something?
My grandkids are gonna be rich!
The real question : WHY to ask yourself THIS question?!
Too much text to say "compound interests make your income grow exponentially. That is, doubling every X amount of years". You can zoom the 6:54 graph out all you want. Since it is an exponential function it doesn't grow linearly (even for small ages)
ok
Which would you invest in for 30 years spy or qqq?
SPY
@@NathanWinklepleckCFA is it because qqq has too much invested in the tech sector vs spy which is more diversified?
Well well , it’s all true and all if we live forever the art of compounding works only when u start with big chunk or u don’t care u wanna be rich at 80
Nothing more nothing less
It's hard to achieve annual 9% return now days.
Last month up 9% ;) (just ignore the first 10 of the year!! Haha)
The way I look at it is that each month millions of workers are investing in the market so there are only so many stocks and issued shares which are diminished by company stock buybacks. So with limited shares and investment demand then stocks will go up. No guarantee that the market at some point or points will decline by 50% or maybe even more.
Thats cool but my grandma is 88 and she can’t even walk. Not much point having $10m at 90
If only we lived to 200 so we could enjoy it.
heres the BIG problem with all these mystical formulas. You'll CONSTANTLY hear that stock market AVERAGES 9.5% return, but this fails to take into account several factors: ONE, fees + taxes, that will knock that 9.5% real fast. TWO, all the businesses that went bankrupt and are NOT calculated into that 9.5% return. The stock market average only averages the successful/surviving businesses. So in reality the problem is not the doubling rule, the problem is finding good investments that return consistently. Finally the biggest problem of all. Yep you can invest at 8 if your parents help, but in reality MOST of the population struggles to get past high school, and fewer and fewer are getting into University...and fewer and fewer of these degrees lead to success (in 1988, a bachelors could yield you a pretty profitable job, I know cause I did it and was making quite a bit with just a bachelor). That world does not exist anymore. Cost of living swallows any net, most people can't save. YES, the upper middle class is still doing ok...the rest: not so much. So whats the solution: only a few. Be born into wealth. Don't have children. Screw people for money. Pretty shallow life. I personally believe instead of investing, people should invest in their own businesses, especiall y ones that get you out of the love of money, and more into improving society. You'll sleep better at night.
This is not true. The S&P 500 includes failed companies. And low cost ETF fees are now 0.03% per year. In an IRA, which most people invest $10k in, will have no taxes. And the 9% is CAGR and NOT an average. Next
Why 72 though?
Okei bro nice video, can you make now best invest from age 30 :p
That's nice, but most people die before 80. That means, if you start early you'll leave a lot of money for your grandchildren. All you need to do is to leave them precise instructions how to live of the dividends so the money lasts for many generations to come.
Therefore, if ur starting late (say 30s +), and u have a simple little job with 10K on a brokerage account.... unless you hv a side hustle or business to earn exponential income... ur really saving for future generations. You'll be too old to enjoy what you're saving.
Why can’t you save multiple 10K’s?
Great now all I have to do is be an 8 year old with 10 grand
10k at age 8! Lol. Good vid tho
Trust fund baby LOL
im expediting the process by DCA 40k a year into my portfolio. I work at a warehouse and live in a trailer.
Impressive!!
So am I crazy or does this guy not explain the significance of 72? Why not use 82? Or 12?
It’s math, brother 😎
@@NathanWinklepleckCFA no shit, brother, and I’ll wager by your puerile retort that you don’t understand it either 🤤
@@NathanWinklepleckCFA allow me to model an example for you. When determining the area of a circle we use pi because it is the constant that represents the relationship between the circumference of any circle and its diameter as a ratio 💁🏼♂️
I can't wait for my spawn to enjoy my hard work
How many 8 year olds have 10k? Or even know what investing means
It’s an illustration. Come on, people
@@NathanWinklepleckCFA This is how things get exaggerated by using improbable data to make it look so good.
If we lived to 200yo we would all be billionaires.
Great rule ! However you need to also add how inflation erodes the value of currency to get a realistic picture 👍🙏
As much as the Math sounds good...lifespan of a human being doesn't always agree to that. Plus, $10M @ 88 years of age, would probably be only worth $500K-1M in the future..hehe. I would be too old to enjoy that money.
Staking on zilliqa at 3 cents offer 15% a yr. That plus the growth of the valuation would work very well. Investing in crypto in an apocalyptic bear market could reduce the beginning time greatly.
Multiply by .85 because the tax man must feed.
I mean that works fairly well, but honestly who wouldn't be able to use the formula FV = P * (1 + r/n)^(n*t) right off the top of their head? lol
obviously joking, thanks for sharing. ✌
Who’s pulling 9% consistently lol, might hit one or two good years like that out every 10 years
Check the data since like the 1800s
What if I’m losing about 30% a year on my investment?
Might be time to change investments 😜
8 years? I was expecting 4 years. That would be more realistic 😆
LOL
Ah crap, I need to go back in time to when I was 8
Do you own a DeLorean, hot tub, or a police box?
Getting one of those might be your first steps.
@@devilmonkey427 hahaha 😄
And then you start at 40 and you start seeing it going up by the time your dead :P
Where did 72 come from?
Math :)
@@NathanWinklepleckCFA Sorry? I think what I am asking is why can't I use 6 or 105? What makes 72 special? Did you really think I was not being serious?
This demotivated me
Andreas Beck mit seinem GPO in der Werbung, 😁
?
@@NathanWinklepleckCFA A.Beck - GPO GlobalPortfolioOne
ISIN AT0000A2B4T3
advertising on youtube before your Video. Germany location
Great I'll try to live until 200 to enjoy my money
;)
I'm going to sleep now someone reply to me in about 7 hours to watch this ty comment section in advanced ❤️
See you back in 7 hours!
Day trading and frequent compounding, based upon good fundamentals, will grow $ much faster than 'buy & hold'. If I could only earn 7-10% per year I'd give up and quit. Even earning a meager 1%/week trading just once a week gives back nearly 68% in a year.
Lolololololol
@@NathanWinklepleckCFA Well you laugh, but how much percentage are you earning per year? I've been day trading for more than 20 years and like I said, 1% once per week IS 67.7% per annum... it's math. If a trader cannot get a simple 1%/week using technical analysis and fundamentals then they shouldn't quit their other day jobs. Additionally, let's say you're following a price movement uptrend and you get 4% in two days and then jump out... and you risked say $200K... that's better than playing buy and hold and maybe eeking out 10% in a year after 20 market ups and downs and negative market news. You might get 4% that week on one stock, 2.5% the next on a different stock, 3.1% the next, etc. Starting with $10K at 1% on a repeating M,W,F,T,Th sequence (using technical charts set at 1 sec. to 1 hour intervals) no single individual could trade the proceeds after ten years because the returns would be too large and they'd have to trade such a large basket of stocks. Nobody has that much time. Excluding taxes, the principal would be >$4,147,000,000.00 - which gets back to the very realistic idea that an 18 year old with average intelligence, and lots of years ahead of them, can trade an original $1000 investment earning 0.6% on Monday and 0.6% on Wednesday every week taking advantage of intraday price fluctuations in stock pricing up to age 38 years and quite easily have >$50M after taxes (from the untaxed $253M) with very little work. However, no reasonable person would keep trying to get so much $ if they simply wanted to enjoy their life. After about 9.5 years a trade grosses >$2K, so why not stop trying to get more and just maintain a principal of about $500K and live off the interest of $3K twice a week? If they're experienced, understand business, and keep up on business news and reports their gains will very likely exceed 1%/week. Trading and frequent compounding will beat the Rule of 72 - which is compounding extremely slowly, at a snail's pace, and usually under someone else's control. Furthermore, using the Rule of 72 and 'trying' to get 9%/annum will ultimately get a large chunk of that 9% eaten by inflation... not to mention taxes. Just looking at inflation, at today's CPI would find themselves netting maybe 2%, and 6% under normal 3% annual rates. At the average annual return of just over 8% on the S&P500 minus 3% average CPI, leaving 5% growth, it'd take 70 years to get $32K on a $1K investment starting at age 18 using the Rule of 72... but taxes will slow it down even more.
You kind of forgot what inflation is each year so it's not 9% lol
72 divided by 7% = 10?, i know he meant flat 7 haha
A weak dollar can signal an economic downturn, making me to ponder on what are the best possible ways to hedge against inflation, and I've overheard people say inflation is a money-eater thus worried about my savings around $200k
The stock market is a way to hedge against inflation. Most notably amidst recession, investors need to understand where and how to allocate funds to hedge against inflation and still make profits.
@@stellaadams593 in my opinion, the impact of the rise or fall of the U.S. dollar on investments is multifaceted but learning how to grow your money has never been easier than now that you can explore and experience a truly diverse marketplace passively by using a well-performing portfolio-advisor.
@@brendazvandasara The stock market is down 20%. Keeping my money in bank could be no good but investing is riskier, I wish to find better value deals as asset prices keep decreasing but lack the skillset, mind if I look up your advisor? I admit this is the only way for amateurs like myself
@@gowonjake I invest with (CLAUDIA TRINIDAD RIVAS) a widely known consultant. You can make a quick internet research with her name mentioned where you can easily get in touch...
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Now just a minute, when I was 8 years old $10,000. could buy you a very substantial house. What 8 year old has enough money to buy a house? Secondly I'm mid 60s now, I can live on far less than what I needed in my early 30s when I had several kids to look after. I certainly don't need a million dollars when Im 88. Wealthy people got wealthy by doing something that generated massive profits. They did not invest at 9%.
It's an illustration of the power of compound interest that you can apply to ANY age, to ANY amount of money, to ANY rate of return... my hope is that people can use this for their own use case to motivate them to save starting today.
So, is what you are saying is, if you want to be a millionaire, first get a million dollars. 😂 Steve Martin
Hmmm... ?
The historical average return of the stock market is not a guarantee of the future average return of the stock market. You make an assumption that you can earn more in the stock market than outside of it. It might be true, it might not be. But no one can assert it as true when no one knows the future. The Japanese stock market stayed in the doldrums for decades. There is no guarantee that the U.S. stock market won't go the same way, given current fiscal and monetary policy as well as U.S. foreign policy. You're basically advising people here (ignoring the disclaimer which is obviously there so you don't get sued) to ignore risk and just chase returns. It's bad advice.
Where an I advocating to chase returns?
@@NathanWinklepleckCFA You do so starting at/around the 4:25 mark. You specifically say "don't lend to other people". You say it comes with higher safety to buy Treasuries, but that the compounding effect is "substantially lower", which is only the case if the stock market performs better than Treasuries over some arbitrary period of time. This is not in any way guaranteed.
Obviously if the markets drop 25%, you didn't compound anything that year. The constant interruption of compounding from stock market swings vs. the constant compounding from safer investments like Treasuries is also a factor.
It's more complicated than just "bigger number better than smaller number".
Please don't try to shift the goalposts and say that you didn't clearly imply (in fact, explicitly state) that safer investments with lower returns are worse than riskier investments with higher returns. They each have their merits and everyone has a different risk tolerance.
And there are probably better things to do with your money than throwing it into the global economic casino of the stock market anyway, depending on a person's unique, individual set of skills and experience which they can put to work generating income and cash flow.
Shouldn’t you explain how difficult it is to consistently earn 9%.
VTI
I've been getting double or triple that for the past several years.