Reply
Go Back   TexasBowhunter.com Community Discussion Forums > Topics > Around the Campfire
 
Thread Tools Display Modes
Old 10-25-2020, 09:25 PM   #1
STGS
Ten Point
 
STGS's Avatar
 
Join Date: Jan 2007
Location: Texas
Hunt In: Texas
Default The Power of Compound Interest

I am sure some of you saw the Financial Tip of the Day post concerning Roth IRAs for kids. Well, the driving force behind that one was compound interest.

Here is another example of that power. Scroll down after you think about it and see how close your guess is.....

If Christopher Columbus had invested $0.01 (1 cent) when he arrived in the Americas (1492), never added any more $$ and earned 8% annually, how much would he have today?





Answer is below......
















$4.4 Quadrillion Dollars. That is 4,000 Trillion dollars, all from 1 penny.

If you don’t believe me, put those numbers into any financial calculator or app. I promise I am correct.


80% of financial success stems from the simple act of saving and not spending. The small remainder comes from how and where you invest.

Good luck and I will post more if you like this type of info.

Last edited by STGS; 10-25-2020 at 09:36 PM.
STGS is offline   Reply With Quote Back To The Top
Old 10-25-2020, 09:28 PM   #2
RMW
Ten Point
 
RMW's Avatar
 
Join Date: Nov 2015
Location: Burr
Hunt In: Down South
Default

That is just crazy!

Don’t think there is that much money on planet earth
RMW is offline   Reply With Quote Back To The Top
Old 10-25-2020, 09:36 PM   #3
Acameron52
Pope & Young
 
Acameron52's Avatar
 
Join Date: Jun 2014
Location: Lewisville
Hunt In: Coleman & Loving
Default

Crazy for sure. I am 25 and trying to take as much advantage of it as i can!! Between my pension at work, maxing out a ROTH and putting into my 457 I’m hoping to be able to retire with no worries in 30 years. It sucks seeing it go out now and not having anything to show for it but will be well worth it in the future.
Acameron52 is offline   Reply With Quote Back To The Top
Old 10-25-2020, 09:36 PM   #4
ThisLadyHunts
Eight Point
 
ThisLadyHunts's Avatar
 
Join Date: Mar 2020
Location: Central Texas
Hunt In: Austin, Boerne, Wyoming, South America
Default

Sending this to my young, single, working daughter. She can be pretty tight-fisted with her money but we’ve trying to get her to be smart about it as well. Locking it away in an IRA is just as bad to her, I think, than not having it at all. Perhaps this analogy will make more sense to her.
ThisLadyHunts is offline   Reply With Quote Back To The Top
Old 10-25-2020, 09:38 PM   #5
eradicator
Pope & Young
 
eradicator's Avatar
 
Join Date: Feb 2007
Location: Arlington,TX/Pecos County
Default

He would have had to start over after 1929 more than likely
eradicator is offline   Reply With Quote Back To The Top
Old 10-25-2020, 09:39 PM   #6
Landrover
Pope & Young
 
Landrover's Avatar
 
Join Date: Oct 2006
Location: Spring
Hunt In: Wherever & Whenever
Default

The most powerful force in the universe.....Albert Einstein!

Sent from my SM-N986U using Tapatalk
Landrover is online now   Reply With Quote Back To The Top
Old 10-25-2020, 09:55 PM   #7
ra61hunting
Six Point
 
Join Date: Mar 2010
Default

If CC had a penny it was counterfeit since pennies weren't invented for another 200 plus years.
I take your point about compound interest. My favorite example is that for one 30 day month you can have 1pennie the first day and double it every day for the month or just take 100,000 dollars one time. Which offer do you take?
ra61hunting is offline   Reply With Quote Back To The Top
Old 10-25-2020, 10:10 PM   #8
STGS
Ten Point
 
STGS's Avatar
 
Join Date: Jan 2007
Location: Texas
Hunt In: Texas
Default

Quote:
Originally Posted by ra61hunting View Post
If CC had a penny it was counterfeit since pennies weren't invented for another 200 plus years.
I take your point about compound interest. My favorite example is that for one 30 day month you can have 1pennie the first day and double it every day for the month or just take 100,000 dollars one time. Which offer do you take?
The penny every time. My rough math says 5.3 million and change on the 30th day.
STGS is offline   Reply With Quote Back To The Top
Old 10-25-2020, 10:27 PM   #9
RascalArms
Pope & Young
 
RascalArms's Avatar
 
Join Date: Mar 2013
Location: Oak Ridge, TX
Default

Wow...impressive.
RascalArms is offline   Reply With Quote Back To The Top
Old 10-25-2020, 10:32 PM   #10
eradicator
Pope & Young
 
eradicator's Avatar
 
Join Date: Feb 2007
Location: Arlington,TX/Pecos County
Default

Now if only we can get someone to guarantee that equation with our investments......
eradicator is offline   Reply With Quote Back To The Top
Old 10-25-2020, 10:32 PM   #11
eradicator
Pope & Young
 
eradicator's Avatar
 
Join Date: Feb 2007
Location: Arlington,TX/Pecos County
Default

Hypotheticals are awesome
eradicator is offline   Reply With Quote Back To The Top
Old 10-26-2020, 07:43 AM   #12
Leonhogboy
Pope & Young
 
Leonhogboy's Avatar
 
Join Date: Oct 2006
Location: Austin
Hunt In: Coryell Co, Lee Co, Idaho, & Anywhere invited
Default

How much is the time value of money and the rule of 72 taught in schools anymore?
Leonhogboy is offline   Reply With Quote Back To The Top
Old 10-26-2020, 08:25 AM   #13
60 Deluxe
Ten Point
 
60 Deluxe's Avatar
 
Join Date: Sep 2012
Location: Coke County
Hunt In: at home
Default

Time is your friend. If I ever figure out how to live 600+ years, I'll invest a penny. LOL
8% compound interest is the kicker. There were a few years that it was easy to get that but with today's cheap money Federal Reserve Bank rates, sub 1% is much more common. When people can get thirty year mortgages in the mid 2% range, 8% is not realistic without big risk.
60 Deluxe is offline   Reply With Quote Back To The Top
Old 10-26-2020, 08:56 AM   #14
Slicefixer
Eight Point
 
Slicefixer's Avatar
 
Join Date: Jan 2019
Location: NE TX
Hunt In: KS, AR, TX,LA
Default

Quote:
Originally Posted by 60 Deluxe View Post
Time is your friend. If I ever figure out how to live 600+ years, I'll invest a penny. LOL
8% compound interest is the kicker. There were a few years that it was easy to get that but with today's cheap money Federal Reserve Bank rates, sub 1% is much more common. When people can get thirty year mortgages in the mid 2% range, 8% is not realistic without big risk.
I sure get the OP's point in regards to saving and totally agree.

However, with 30 trillion in debt (that we know of.... audit the Fed and it's probably double) 8% is a bit unrealistic.

If the Federal Money Fairy handed you a $100.00 per second it'll be 320 years before ya got a trillion. These a-holes in DC spend it like it's "found money." Which, to therm, I guess it is......

Sent from my LM-Q720 using Tapatalk
Slicefixer is offline   Reply With Quote Back To The Top
Old 10-26-2020, 11:31 AM   #15
wes122984
Pope & Young
 
wes122984's Avatar
 
Join Date: Oct 2007
Location: Plano, TX
Hunt In: Coalgate & Atoka, OK
Default

yeah in the last 2 decades you are actually losing money to inflation if you are in compounding interest vehicle.
wes122984 is offline   Reply With Quote Back To The Top
Old 10-26-2020, 12:42 PM   #16
curtintex
Pope & Young
 
curtintex's Avatar
 
Join Date: Oct 2009
Location: Porter, TX
Hunt In: Trinity County
Default

Just as important as saving, is analyzing compound interest from a debt perspective. I guarantee you there are more TBHers with debt than there are with savings. Compound interest will absolutely kill you from a debt perspective. That **** works against you while you’re working, while you’re sleeping, while you’re on vacation, while you’re charging something else on that credit card or while paying $700k over 30 years for a $200k house. Before anyone worries about compound interest working for them, they should eliminate it working against them. In my humble opinion.


Sent from my iPhone using Tapatalk
curtintex is offline   Reply With Quote Back To The Top
Old 10-26-2020, 12:56 PM   #17
Slicefixer
Eight Point
 
Slicefixer's Avatar
 
Join Date: Jan 2019
Location: NE TX
Hunt In: KS, AR, TX,LA
Default

Quote:
Originally Posted by curtintex View Post
Just as important as saving, is analyzing compound interest from a debt perspective. I guarantee you there are more TBHers with debt than there are with savings. Compound interest will absolutely kill you from a debt perspective. That **** works against you while you’re working, while you’re sleeping, while you’re on vacation, while you’re charging something else on that credit card or while paying $700k over 30 years for a $200k house. Before anyone worries about compound interest working for them, they should eliminate it working against them. In my humble opinion.


Sent from my iPhone using Tapatalk
Yep....👏👏👏...100% One of the most overlooked changes that's occurred over my lifetime is the universally accepted definition of "afford".....

My Ford dealer hunting buddy recently told me this. The number 1 concern of the vast majority of his customers is one thing...."what's the payment?" A Toyota master mechanic also told me recently that Toyota is now offering 10 year financing....10 years? On a vehicle?

Financing a business is understandable and quite often necessary, an absolute. 15/30 @ 2%/3% on a home is understandable, but, 10 years on a vehicle....boat....etc?

I just have a hard time getting a handle around this "stacking debt" mindset. However, it's not any of my biz....

IMOP, it ain't going to end pretty for a lot of folks....

Last edited by Slicefixer; 10-26-2020 at 01:07 PM.
Slicefixer is offline   Reply With Quote Back To The Top
Old 10-26-2020, 01:32 PM   #18
Landrover
Pope & Young
 
Landrover's Avatar
 
Join Date: Oct 2006
Location: Spring
Hunt In: Wherever & Whenever
Default

Quote:
Originally Posted by curtintex View Post
Just as important as saving, is analyzing compound interest from a debt perspective. I guarantee you there are more TBHers with debt than there are with savings. Compound interest will absolutely kill you from a debt perspective. That **** works against you while you’re working, while you’re sleeping, while you’re on vacation, while you’re charging something else on that credit card or while paying $700k over 30 years for a $200k house. Before anyone worries about compound interest working for them, they should eliminate it working against them. In my humble opinion.


Sent from my iPhone using Tapatalk
In for the game ending WIN!!!!

Sent from my SM-N986U using Tapatalk
Landrover is online now   Reply With Quote Back To The Top
Old 10-26-2020, 01:35 PM   #19
Landrover
Pope & Young
 
Landrover's Avatar
 
Join Date: Oct 2006
Location: Spring
Hunt In: Wherever & Whenever
Default

Quote:
Originally Posted by Slicefixer View Post
Yep.......100% One of the most overlooked changes that's occurred over my lifetime is the universally accepted definition of "afford".....



My Ford dealer hunting buddy recently told me this. The number 1 concern of the vast majority of his customers is one thing...."what's the payment?" A Toyota master mechanic also told me recently that Toyota is now offering 10 year financing....10 years? On a vehicle?



Financing a business is understandable and quite often necessary, an absolute. 15/30 @ 2%/3% on a home is understandable, but, 10 years on a vehicle....boat....etc?



I just have a hard time getting a handle around this "stacking debt" mindset. However, it's not any of my biz....



IMOP, it ain't going to end pretty for a lot of folks....
......and when it ends badly they will blame everyone but themselves!!!! I definitely look to pick up some "fire sale" homes come the 2nd quarter of 2021 if projections come true. Could be worse than 2008.......

Sent from my SM-N986U using Tapatalk
Landrover is online now   Reply With Quote Back To The Top
Old 10-26-2020, 10:08 PM   #20
Matt_C
Ten Point
 
Matt_C's Avatar
 
Join Date: Oct 2009
Location: McKinney, Tx
Hunt In: Texas
Default

Quote:
Originally Posted by Landrover View Post
......and when it ends badly they will blame everyone but themselves!!!! I definitely look to pick up some "fire sale" homes come the 2nd quarter of 2021 if projections come true. Could be worse than 2008.......

Sent from my SM-N986U using Tapatalk
You must be taking into consideration that democrats are going to win too....
Matt_C is offline   Reply With Quote Back To The Top
Old 10-27-2020, 10:35 AM   #21
Landrover
Pope & Young
 
Landrover's Avatar
 
Join Date: Oct 2006
Location: Spring
Hunt In: Wherever & Whenever
Default

Quote:
Originally Posted by Matt_C View Post
You must be taking into consideration that democrats are going to win too....
Not at all. The market MUST reset. Our debt is due.....overdue. Mother Theresa can take office and the same financial scenario will be in play.

Sent from my SM-N986U using Tapatalk
Landrover is online now   Reply With Quote Back To The Top
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump


All times are GMT -5. The time now is 12:24 PM.


Powered by vBulletin® Version 3.8.11
Copyright ©2000 - 2020, vBulletin Solutions Inc.
Copyright 1999-2012, TexasBowhunter.com