Compounding numbers
I love math. That’s why I was a Mathlete back in high school. VP of the Mathletes, nonetheless. I also love money, ’cause it buys stuff. And who doesn’t like stuff?
So I was looking @ my portfolio today (GREEN DAY!), and figured out that I’m averaging a 19% return this year. Wow – sure beats the Dow, Nasdaq and S&P 500. What if I keep this up?
Well, at age 59-1/2, we’ll be sitting on $4,636,138.30. From that point forward, we’ll withdraw 6% per year, so we’ll only be growing at 13%, rather than 19%. Our income will be over $250,000 the first year. I’ll live to be about 80 and, at that time, have over $60 million, and a yearly income of $3.6 million. Laura, who will live to be at least 103, will see our fortunes surpass $1 billion. Her income will be $60 million that year, and I have no doubt she’ll find a way to spend it.
If we go against Buffett and keep all our money, the kids will each receive $334,569,726.79 when Laura dies in 76 years. Of course, they’ll first have to pay $500,104,590.19 in taxes. So they’ll only receive $167,868,196.73 apiece. Poor things.
Yeah, compounding numbers sure are great… if only the real world worked like that. And since it doesn’t, I’d better get back to work.
ha! that was a great post!