Get rich slow with the miracle of compound interest.

redpillbanana · 2017-10-21T15:59:34+00:00

The hours you spend studying and managing your personal finance will be some of your most highly-paid hours. In the end, it could come out to thousands of dollars or even tens of thousands of dollars per hour. Compare this to the return on your time for watching professional sports or Game of Thrones.

A great book on personal investing is https://www.goodreads.com/book/show/79351.The_Four_Pillars_of_Investing

The greater lesson here is to think about where you are spending your time and what impact it will have on your life.

PetefromAccounting · 2017-10-21T19:45:46+00:00

Started investing at age 20. 7 years later my net worth is 6 figures, more than many other people my age. All that with just a college degree and a boring accounting job.

The only debt I have is my mortgage. I’m gonna take 25% of my wealth to open up my own firm within 3 years.

LabRat314 · 2017-10-21T18:38:03+00:00

The financial independence sub changed my life. On track to retire at age 40

the_Elders · 2017-10-21T18:23:30+00:00

Imagine you save $1000 a month for 40 years. At 5% returns plus or minus 2% you should expect about $1.5 million. But imagine you delay your savings for 5 years and train your mind to find a job that allows you to save $2,000 a month for 35 years. At 5% returns plus or minus 2% you should expect about $2.2 million.

If you are an 18 year old and want to take life seriously then right now is the time to be training your mind and body. Get an advanced technical degree, build relationships up, build your body up. By age 25 you can be the guy aiming for $2.2 million or more. There isn't a thing you can't perfect in 5 years of work but few are willing to sacrifice those years.

Compound interest comparison

rpleo · 2017-10-21T18:48:21+00:00

Exactly! We have enough Pussy getting courses on this subreddit.

We need this type of useful posts in our lifestyle. Keep posting!!

vengefully_yours · 2017-10-21T16:30:18+00:00

Take it from experience. Do. Not. Get. married. EVER. That is the fastest way to go from having money to living in your car or under a bridge. It is impossible to save money when the state leaves you with less than you need to live, and takes more if you earn more. Imagine the time you lost you could have been earning for you, and saving for your future instead of paying her most of your gross for 20 years.

I'd have millions right now if I'd never gotten married.

Trumeau · 2017-10-21T17:22:32+00:00

Vouching for this. I've been shunting money away into investments since I was 19. I'm 24 now with 110k in there.

Now that I'm back in school I was able to loan against my investments. They're still in the account making money but at the same time I can borrow against them for below prime interest rates at any time. I'm currently y cleared for 24k of no fee funds whenever I need them.

Do it early! You can always reevaluate your portfolio later.

WISE_TURD · 2017-10-21T19:10:37+00:00

Remember to NEVER SELL when the inevitable crash/pullback happens and keep 10% of your portfolio in cash so you can pounce on the low prices.

Market crashes typically redistribute wealth to those who already have it. Example from the last crash:

Average joe loses job during economic crash
Even IF joe held 10% of his overall portfolio as cash (unlikely, as he probably lives paycheck to paycheck), it's only $10k at best.
Joe has to either liquidate some of his retirement account to pay mortgage (incurring a 10% penalty in the process), or sell his house when both values are lowest. He realizes his losses, and is jobless.
rich bill's portfolio isn't as large as it was last year, but he doesn't have to sell because he held cash. In fact that 10% he held as cash is a great deal of money nominally, a little over $1 million.
rich bill goes out and looks for some well-located property to buy.
bill invests in multiple properties that total to $800k (one of which is joe's) and invests the rest in the s&p 500.

Moral of the story: have some cash on hand and multiple streams of income so your eggs aren't in one basket. If you work in an feast-or-famine industry like oil and gas, please don't buy a bunch of shit you don't need like a fuckhead.

InterstellarGlue · 2017-10-21T21:28:54+00:00

Best return of investment is good health. Get your teeth fixed. Eat well. Do sports. Take care of your family and close friends. Educate yourself. Learn useful skills. No finance crash will take that from you while paper money goes poof in seconds.

A years worth of cash on hand and some long term investments are "nice to have" but won't be game changers. Most importantly lots and lots of paper money isn't worth your time, health, and happiness.

Archangel_1993 · 2017-10-21T16:30:21+00:00

I generally agree with you but Interest rates are pretty low nowadays and that's the way the government wants it as they believe it encourages economic growth (Keynesian model). I will not go deep into this whole subject of economics, too hard to explain. I am more of a believer of Austrian and classical economics.

However, the returns from compound interest like a savings account are low you may have gained 25k in interest and dividend (which is impress in its own right) but I am going to ask you this question how much was lost due to inflation? 25k today is not the same as 25k 5 years ago.

If you understand that question and answer it right, then you understand the bullshit of the real estate lie that the value of property doubles every 7 years or something. (they didn't account for inflation)

You may have gained 3% on a savings account this year but inflation was 4% this year so your purchasing power decreased or the value money went down by 1%. (just an example)

You are very smart and having 100K in your bank account with no debt is pretty impressive and you are well off than most people. Congrats!

I just want you to think more and expand your horizons you can get more of a return from Stocks (if you become really good with stocks you can use option to magnify your returns by 10x), Bonds or real estate (you should be aiming for positive cash flow, don't fall for the negative gearing bullshit).

You have only reached the tip of the iceberg.

Girls and people generally don't care if you will be rich they only care if are rich now.

tanqop · 2017-10-21T18:17:07+00:00

We need more posts like this. It is so much more important than anything else. A healthy body with a healthy finance is the path to success in life.

2DamnAmerican · 2017-10-21T15:42:38+00:00

The amount of uneducated hate on here is ridiculous. Great post OP

guysir · 2017-10-21T21:31:21+00:00

Buy some Bitcoin too. Consider it a lottery ticket that has a decent chance of paying off in the next several years.

CRRZY_MAN · 2017-10-22T02:51:41+00:00

Or get rich fast with the miracle of investing in Bitcoin and alts.

segagaga · 2017-10-21T13:55:38+00:00

I am not in America, do you have any advice for compound interest investments in UK/EU?

criveros · 2017-10-21T16:26:52+00:00

And here I am about to put half my savings on bitcoin.

no_face · 2017-10-22T07:40:13+00:00

Bitcoin bro. Was 1000 at the beginning of the year. 'Nuff said.

Insendi · 2017-10-21T22:40:03+00:00

The second paragraph opening needs more attention. I feel like someone people think TRP is just a get laid quick scheme but I’ve been following this for nearly 8 months now and while I have gotten laid, my life overall has gotten better.

[deleted] · 2017-10-21T23:42:40+00:00

This is a good post for youngsters but as you're only 30, 100,000 ain't shit and neither is a million anymore, really.

But keep on earning and it'll happen

DeterBenchPress · 2017-10-22T02:07:42+00:00

Alternative tip: Buy OTM NFLX calls during the next earning report.

Reason: SJW will continue to abandon Hollywood, switch to Netflix.

Result: Get really fucking rich

Sebassbacchanalia · 2017-10-21T15:10:26+00:00

Can u tell us what cash u started w, how much you have added of your own capital and what the balance is? Want to see how much you’ve actually earned from the funds. I’ve been doing it for 3 years now and have put in about 30k of my own money. Over 3 years I have increased about 10% = 3k in interest. It’s not very exciting.

MaroonPillAccount · 2017-10-21T19:50:10+00:00

M.Eng student right now and evaluating some different offers in the six figure range in low cost of living areas.

At 22 years old, there's just something about the thought of paying off all my debt, living within my means, and being able to afford and pay off a house within a decade while maxing out employee matching, roth iras, and the like.

I'm hype as fuck.

fatmofoLOL · 2017-10-21T17:38:57+00:00

I'm doing this, in the UK you can contribute £20k a year tax free into a ISA, I am able to contribute the max with my salary, if my investment get 8% a year over 40 years then my investment will be over £6million by my early 60s. Over time the contribtuion amount may go up to keep with inflation so it could amount to well over double digit millions (hopefully).

PossibleNurse91 · 2017-10-22T00:05:53+00:00

Love this, def post that people need to save. How much is it to open a Roth IRA?

sssozi · 2017-10-22T11:11:06+00:00

More posts like this. It’s important to round yourself off financially and socially, this sub focuses mainly on socially though.

I’ve been investing since I was 16. Dad helped open my account and at 18 I’ve been on my own.

Roth IRA and mutual funds for me but returns are good, need to contribute more and read up more.

GalacticLinx · 2017-10-22T22:38:54+00:00

this is the kind of luxuries a USA citizen can have, compound interest.

Imagine living in a 3rd world country where the inflation beats the crap out of your saving interest.

I hope BitCoin saves us from that, its unfair, but i cant find any wallet or vault with compound interest. The only one I found is a faucet which is one of the oldest (i wont name it to avoid spam or referals).

But i guess is still risky to put all your savings in bitcoins. It is such a young currency

shut_up_liar · 2017-10-21T21:19:39+00:00

At thirty, I started investing in rental properties. Bought 5, then focused on paying them off. Now, at 40, I have over 12, completely paid off, rental properties, worth over 1 million dollars. AND, they're relatively immune to economy crashes, since everyone needs a place to live, and the majority rent. Much better than the market, since it's physical assets, directly in your control.

gaki123 · 2017-10-21T18:46:51+00:00

If this post were some shit like "How my gf cheated on me" or "Man loses half his assets in a divorce" and some lame rage bait shit it would have more than 400 upvotes. SAD!

BoobToArmRatio · 2017-10-21T23:21:52+00:00

Y'all need to read millionaire fast lane by MJ Demarco. In the game of life and finance, using the strategy of investing and relying on compound interest to create wealth isn't a good plan.

It is a strategy, but one shouldn't rely on it as their ticket to financial freedom.

WorldNewPilla · 2017-10-21T17:55:49+00:00

So, do you simply invest in stocks? What research do you do before hand?

ohsowetness · 2017-10-21T20:03:23+00:00

Thank you for this. Which investment house / bank would you recommend starting a Roth IRA with?

What did you base your decision on ?

Gracias in advance

[deleted] · 2017-10-21T20:57:14+00:00

17 year old here. When I turn 18 is it a smart idea to start a Roth IRA just keep putting money in? I’m saving money rn in my savings account and I have around $1K. The only things I spend money on is my Apple Music subscription and occasional food. I’m also going to Community College for 2 years to save money and work at the same time.

bigOlBeta · 2017-10-21T23:50:16+00:00

If you can read, you can learn to invest. Don’t give control of your money to anyone

xytrooo · 2017-10-22T07:34:23+00:00

its quite possible to live 200 years if science develops a therapy that takes a guy who is expected to live to 80 today and adds 10 years to that in the next 20 years, than 15 years over the next 20 , than 20 years over the next 20 , than 40 years over the next 20 , etc.

see you get more life expectancy the more time passes, you get more likely to stay, not immortal by any sense. but kind of getting less likely to die with time.

[deleted] · 2017-10-22T12:15:07+00:00

Cool man . Any UK equivalents to Roth? Thanks

[deleted] · 2017-10-22T13:56:59+00:00

I'm 19 and set up a Roth IRA around March, invested $2500 into a health technology mutual fund that has excellent ratings and an average 14% annual return since it's inception. Compounds monthly.

Been putting in about $50 a month and have actually accumulated several hundred in interest already. I'm probably going to buy 2 or 3 more funds in different sectors to diversify, but this is a lot easier than I was expecting.

If you're my age, save your money (if you can) while you still live with your parents and don't have bills. Invest in a Roth IRA ASAP. It's one of the absolute best things you can do right now to get way ahead of the curve.

Theguygotgame777 · 2017-10-22T17:25:12+00:00

I would like to suggest a very nice book on just this subject, called "If You Can."

6d65746164656c7461 · 2017-10-22T17:35:14+00:00

This is great. This advice is in very much need. Having your personal finance in control means freedom to chase other interests, and thus improve as a person. I have graduated in Law and in Economics (what would be in the USA two distinct majors), and have a good paying job in my country, and it baffles me how my coworkers are completely unaware of this advice (just as much as they are unaware of the redpill truths that permeate society).

The same discipline you develop by getting of the chair and hitting the gym is needed to avoid opening your wallet when you don't really need.

There are very good book suggestions in here, but I'd like to add William Bernstein's "The Inteligent Asset Allocator", as asset allocation is probably the most important factor in investment success and to create a passive income stream.

SpecialSpnk · 2017-10-22T21:26:23+00:00

Up vote for this. I have just recently got serious in the study of finance and investing. It has already paid off largely with changing my mentally and how I think about money.

Invest invest invest. The difference between someone who retires poor and someone who retires rich is only consistency

[deleted] · 2017-10-23T02:48:39+00:00

Can agree that compound interest will not get you 'rich' by any stretch of the imagination. Saving cash is always good, but there is one concept I've only seen a couple times on this thread that I wanted to touch up on.

Home ownership. By definition the biggest investment of the middle class. Can be a huge money pit if you lack brain cells or luck. I bought my place at the height of the oil bust in 2015. Low interest rates locked in for 5 years, low price on the property. It's all about timing and having cash saved. Can be used to directly increase your wealth. If you're single, you can rent out rooms (or the whole house). Once its paid off it's obviously not going to cost you more than maintenance and utilities and you can take your cash and throw it around else where. When I bought my place, I made sure it had a shop. I use it to not only maintain my vehicles ie: fluid changes, tire rotations, wear part replacement. But I plan to rebuild my vehicles in it. I figure I can get thirty years out of a diesel pick up (The way I drive, the amount of mileage I may put on in a year). The biggest expense for that vehicle is the body rusting off of it every fifteen years. Buy yourself a mig welder and learn how to run a bead and lay down the spray and you can do everything yourself with enough time. That 20k investment for a used truck in good condition may last you a long long time. I've used the shop to flip/trade projects and toys so I don't have that expense. My roommates pay down the principal of my mortgage, I'm never home anyways so it's a win-win.

A lot can be said about purchasing required items for any sort of grid down scenario. This system is only going to be functioning provided something bad doesn't happen. IE: The Yellowstone Caldara blowing smoke and ash and inducing nuclear winter. Killing crops and burying everything under ash. Learn to enjoy yourselves. It's all meaningless anyways

Edit: Grammar. Probably still errors. Oh well

Slut_Slayer9000 · 2017-10-23T17:00:56+00:00

Suggested reading for this topic: "Rich Dad Poor Dad" and "The Slight Edge" both very good books that hammer home the point of compound interest and using it to your advantage.

Snufek · 2017-10-21T15:43:37+00:00

What is your interest rate, that your money will double in 6 years?

Torabor64 · 2017-10-21T14:19:42+00:00

Compound interest never made anyone rich, and certainly not in 10 years. It's actually more like living like shit during your good decades just to have enough to live when you are too old to do anything. No thanks, I'll pass.

Compound interest is only useful if you are already rich and want to retire.

LeftHello · 2017-10-21T19:46:39+00:00

Compound interest is overrated. Yes, you should absolutely be investing and doing it, but it is way more effective to increase your savings, and increase your income.

Notice how every time you see articles about compound interest, they assume you are adding to the principle every month/year. Most of the final amount is just from you adding money to the principal, and a fraction is actually from the interest.

MattyAnon · 2017-10-21T16:59:03+00:00

It's the thing that turns 10k into 6.5 million in 200 years.

Flaw: banks and governments regularly go bust. Comprehensive list here, your country likely appears a number of times and surprisingly recently: https://en.wikipedia.org/wiki/List_of_sovereign_debt_crises

The odds of your money staying safe for 200 years are small. It's just too tempting for companies and governments to put their debts off into the future and then default on them when they get unmanageable.

One small but current example: the pensions crisis causing the city of Detroit to go bankrupt. The city pretended to act as a savings scheme for people (earn less now, bigger pension later!), which makes great short term sense on the balance sheets. They did it so much they now can't afford to pay and are defaulting on their debts. This was your pension that you worked 50 years for? Tough shit.

Even if I dont contribute another dime, in 6 or 7 years it will double, assuming we don't have a crash

The current interest rate is around 3%. Anything more than that and you're increasing the risk of losing all of it. That's 24 years to get a low risk doubling. If you want more risk then fine, but the risk lowers the effective average payback.

For most people, young especially, some sound advice is this:

Keep 3 months living expenses plus enough money to move city in cash. Live as frugally as you can until you have this. Later aim to increase this to 6 months. This is "fuck you" money - enough to be able to say "fuck you" to ANYONE in your life: your partner, your friends, your boss. This means you are no longer living in scarcity of options, because you can fuck off and leave without difficulty or hardship.

You have 3 months on hand in a current account. You then get another 3 months in a 3-month notice account. You won't need it instantly because you have the first chunk for that. Save what you can in government enabled tax-free accounts (varies by country).

The lets you leverage your primary asset - your time and skills. 5% per year on 100k is nothing compared to being able to move city and get a 10k/year pay raise every year or two.

In short, max out your career before trying to invest in stocks and bonds and stuff - it's lower risk, more fun, and provides better returns until your savings account is comparable to your annual wage.

novasoline · 2017-10-21T18:37:15+00:00

The idea of being a wage slave through your youth so that when your old and can no longer get your dick up, and if the gods haven't struck you with some cancer or some brain deteriorating disease, and if the economy hasnt tanked, you can enjoy the priveledge of dying slowly but comfortably in your home... is blue pill, please send me back to the matrix type of garbage.

40 years is a shit load of time to not be living to the fullest of your potential. How many billions would warren buffet or bill gates pay to add 40 years back to their lives? Yet with "the miracle of compound interest" you can throw it away for a fraction of that.

fromthecrypt8 · 2017-10-21T22:01:25+00:00

Great addition to the trp mindset. To put it simply, be smart with your money. It’s addictive seeing your funds grow. Get the shit you really want still, but be honest with yourself when it comes to stuff you want but still can easily do without. Pick a few gems (like if motorcycles is your big passion, save up for that new bike), then save and invest the rest.

BoobToArmRatio · 2017-10-21T16:19:03+00:00

Everything great but crisis is incoming and everything you save will be lost. Only increasing cash flow is the way to survive which means business is only way.

COMMO_Fix_It_Bitch · 2017-10-21T17:40:54+00:00

A longterm investment strategy that soley relies on time and the market not fluctuating... hey look at this compound interest calculator, it says if I get an annual return of just 8% every year for the next 10 years I will be a millionaire!

You're better off spending that money to increase your earning potential now with more education/certifications/etc, instead of putting it all away so it can fight off inflation, taxes, and management fees. Fucking high school level investment class bullshit post.

HeatCreator · 2017-10-21T19:46:59+00:00

Who do I talk with to open a Roth IRA, and do I need a lot of money?

drsherbert · 2017-10-21T22:43:38+00:00

If I start a Roth IRA, can I keep my money on the sidelines until after the market correction?

CaffineAddictNYC · 2017-10-22T01:02:30+00:00

Buffet didn't really prove what most people think with that study, and it harms more investors than anything else in finance by encouraging investors to invest without financial goals of an individual to be considered. It is however highly popularized by the internet boom combined with a period of sensational overall market growth, which will likely never happen again in our lifetimes.

The most important thing is to save and invest with individual financial goals in mind. Most people do not have the knowledge, time, or temperament to do this on their own. A study by Vanguard (the main index fund company) estimates a financial advisors worth is approximately 3% annually. https://www.vanguard.com/pdf/ISGQVAA.pdf

However, because we are in a period of such immense market growth, it is hard for people to understand these inherent risks. It is like trying to convince a first time homeowner that they should be wary of taking on too much debt to buy a home right before the Great Recession.

[deleted] · 2017-10-22T03:48:16+00:00

My local University offers Industrial Engineering. I was like the logistics side of things in it

RedPilledGodEmperor · 2017-10-22T04:53:37+00:00

Get involved in options trading. Buy slightly out of the money call options that expire in 6 months - 1+ years, in stocks that you are bullish on.

1-8000-HOTLINEBLING · 2017-10-22T07:37:16+00:00

I am 19 , studying BA and have 6000€ to invest. Where/how should I start, where can I learn? Any suggestions? Thanks

Hillarysdilddo_2016 · 2017-10-22T15:32:54+00:00

Hey OP,

I know people say "don't try to time the market" but how do you feel about investing at this very moment?

You've answered a couple of my comments, but this is specific to the general situation where the market seems peak. Literally historic highs. Do you think investing in the SPY or similar is a good idea right now? Market manipulators like Soros already bet against the SPY and he seems to have missed the mark, but that indicates that I'm not the only one thinking a downswing is necessary or near. I've read quite a few opinions that express confusion at how the market continues to climb.

Buying SPY at $260 / share could be a shitty investment in the coming year, but I just don't know. What do you think?

atlantique16 · 2017-10-22T22:37:39+00:00

My dad passed away last September and his retirement fund collected over $30,000 in interest in the last year. I don't know exactly how it was done or what kind of investment it is but I've been told it'll continue to rise and by the time I'm in my 30s (12 years or so) it'll be up to a million dollars.

nwhitey12 · 2017-10-27T01:26:59+00:00

I much rather go on spring break trips to be honest Experiences>Money in my opinion

blackedoutfast · 2017-10-21T21:05:26+00:00

this is sub is for discussing sexual strategy, not repeating the same boring advice everyone has already heard a million times.

if you had some interesting or novel spin on finances then maybe it could be an interesting topic. but "if you are frugal and invest X amount of money now you can have a million dollars in a few decades!" is such a bluepill beta dad topic.

also you'll never be rich if you just rely on compound interest due to inflation. even the billionaires who are known for being frugal boring betas (warren buffet) made most of their money from careful investing, not just throwing it in a 401k and letting it ride.

BoobToArmRatio · 2017-10-21T16:22:06+00:00

Just buy a low fee target date fund from vanguard and put $$ into it every month. That's it. Simple and the most effective

Dmva100 · 2017-10-21T16:24:29+00:00

Invest in MREITs. Do it for the dividends. The way those companies are structured they are required to pay out roughly 90% of earnings to shareholders because they cannot hold excess cash balances.

VanityKings · 2017-10-22T06:40:06+00:00

commenting for later reading

Mr-Kabuki · 2017-10-22T07:19:32+00:00

how can i start investing if i live in canada?

Linblow · 2017-10-22T20:27:08+00:00

Compound interest is a Slowlane Strategy. Wanna get falsely rich by the age of 60 when you're not young anymore? Sure, go ahead.

You need a Fastlane. It allows you to get rich fastly(*) and get your true financial freedom. Put simply, make millions with your own buisness in 5-10 years. Consequently, you no longer trade your time for money. Instead, you make money work for you ("buisness tree") with your assets and passive income.

Long topic. Get the excellent book The Milionaire Fastlane by M. J. Demarco. This guy was already a multi-millionaire when he published it. He made it to spread the truth, not to earn money. Unlike the gurus who teach you one thing, but forget to tell you they make their money by precisely selling their book! They don't apply what they teach. Don't be a fool, go fastlane.

*nobody said it was easy!

_Ozu_ · 2017-10-22T01:54:36+00:00

Don't get rich slow, it's a losing strategy. Read 'The Millionaire Fastlane' for better advice.

John_Philips · 2017-10-21T15:50:03+00:00

Ha! Like I actually have the money to invest in the first place

max_peenor · 2017-10-21T14:40:17+00:00

Given that I had to throw an unholy fit to get my primary clearing bank to not put a negative interest rate on my cash deposits, this might not be the best solution given the current political and financial environment. Thirty year ago, sure.

Average_Scrub · 2017-10-21T15:05:24+00:00

This is bullcrap. There will always be a crash. It's inevitable. The interest rates barely cover inflation.

falcon10474 · 2017-10-21T18:22:19+00:00

Ok, but with my social security number out there for anyone to buy and all these banks of america scandals, who do you even trust anymore?

And so what do i do? Take my money to reputable bank of something and say i want to open a roth ira and when they ask what do i want to invest in just say the entire stock market?

Can you open multiple roth iras with differant banks or just one per social security number?

Please save the do some research responses cause i've tried and information overload, it's just too much and then you get conflicting advise and you dont know who's right. Just a couple of simple questions asked and you'll never hear from me again

BoobToArmRatio · 2017-10-21T18:35:19+00:00

Just to add something from a different perspective:

Yes, as an individual this is a great thing and should be used widely and strongly. For society its horrible though and should be avoided. There is a reason why religions ban this shit.

This system will necessarily destroy the real economy on which is it build. You can't out-produce compound interest on the long run. Thats why 8 people own as much as half of humanity right now.

I mean, even this thread shows how it works. People a) consume less to save money and b) realize, that working (i.e. producing) is less beneficial than owning things. So, they focus more on optimizing their finances instead of working and producing things. This has a big impact on how the economy can produce and sell things.

The simple question is what your money is worth in the long run. It has value, right? Where does that value come from? You can buy goods and services with it. Since you now-rich people don't have to work that hard anymore, you will not produce these real-values. Thats the whole point of this undertaking, right?

Yet, others have to work harder and harder to produce the value of your money in the real economy. And, which is important, you have to invest that money somewhere. Your interest money doesn't fall from the sky, it has to be produced in a productive undertaking of some sort. Even nowadays its getting harder and harder to find useful investment options for real economic activities. Often its more lucrative to put it in investment funds than trying to get a business going. That might be true for companies themselves, who then turn into some kind of banking-but-not-a-real-bank business. At that point the economy tries to pull off a magic trick. You put some money into a magic hat and hope you find more money in it than you put in there 2 minutes later. Right now that works. But at some point in time someone will realize that doesn't actually work and then everyone is fucked --> the system resets.

That is how it has worked for quite some time now and the smart people who win at this game put their money into actually existing values like land, real estate or productive businesses. Gold, art and many other options exist, too.

So, people work their asses off for a small slice of this whole cake and in the end the fatties at the table managed to win everything that is actually necessary for a living and wait till the next round of the game starts. Everyone else? They are fucked.

And that is why the big players stay at the top. At the beginning of the next round they start with a huuuuge advantage and simply keep buying more stuff (the truth is, on average you can not outcompete someone starting with a couple of millions unless they suck and you are awesome. Which does happen, but thats more an insult to them than a compliment for you).

This goes on until the normal people are fed up and start a revolution/war to level the playing field again.

Really, same shit different year. And everyone keeps playing because it pays off big time.

drsherbert · 2017-10-21T22:55:43+00:00

With the DOW over 23,000 I’m a little nervous to buy at this point. I do however think Amazon is still a good buy as they continue to take over Walmart’s market share and the brick and mortars continue to get beat up by online retail. The malls are empty, but they keep building more retail space in my neck of the woods.

tailingloop · 2017-10-21T22:24:24+00:00

You are not a man if you fall for this.

Spets87 · 2017-10-22T00:26:40+00:00

Compound interest is bullshit unless you have massive capital to start you off. You have two options: 1. wait 50 or so years for compound interest to work on some paltry sum of money, and be too old to do anything worthwhile with it. 2. spend 10 years starting a business and get it up and running. Sell that business and then use the cash to invest into blue chip stocks/ bonds etc and live off dividends for rest of life.

neo2419912 · 2017-10-22T01:45:29+00:00

What a shitty post and i only read the title. "Get rich slow"? How about "learn and practice yourself into wealth", "develop your skills into wealth"? Screw compound interest, that ship has sailed. The big one is taxes, the one no one talks about and the one that steals the most out of our income and cuts our actives every year. Instead of having money sitting down, first build up a safety pile and use the rest to develop your skills (books, seminars, speakers, courses).

RushingPrecision · 2017-10-22T04:48:40+00:00

Lol the fuck is this a shitpost? Both wsb n r investing r both smh right now at this level of autism

GoGetting · 2017-10-22T10:13:22+00:00

Getting rich slowly from compound interest is a false lesson.

Indeed getting rich slowly even by itself has little virtue. What use is $1M when you're 60 by living frugally? Yeah I'm a millionaire!... but just not in the way that makes people want to become millionaires...

The whole purpose of money is to spend it. Otherwise you're like Scrooge, sat in a dark candle-lit room counting your gold coins, like that's a virtue. Until you die and it goes to someone else.

But let's actually look at the "getting rich by compound interest" bromide. Suppose you live in a country with no tax on dividends and capital gains (I think HK?), and the market increase/interest you receive is above inflation: yes it's an OK plan.

But in the real world, where you currently get around 0% interest, against 3% inflation or more, which figures in after tax, there's no wisdom in it.

A simple illustration. Suppose I buy a house for $1M and sell it 10 years later for $1.1M. So I have a capital gain of $100k. I then pay tax of 30%, so I'll have to pay $30k. But concurrently, inflation has meant that $1.1M now is the same value as $1M 10 years ago. Therefore, I've actually simply lost $30k, not made $70k.

So the wisdom of this has everything to do with the rates, inflation rates, and tax regime you live under.

And always remember: $10k at 25 is worth way more than $10k at 40, in terms of the effect it can have on your life. Sometimes sacrifices are just sacrifices -- and do you consider a sacrifice alone to be a virtue?

Everything in balance and in context.

Do Not Marry