this post was submitted on 25 Oct 2024
871 points (98.9% liked)
196
16381 readers
2203 users here now
Be sure to follow the rule before you head out.
Rule: You must post before you leave.
founded 1 year ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
Interest is insane when you think about it
thats why investments are inportant for long term. the problem we face as a society is that the majority of people cant afford to make these investments, as they are living day to day with their paychecks.
you just need to have unlimited time, at 3% annual interest, it takes 77.89 years to 10x your money. it just happens that 532 years is 6.8 times 77.89 years, therefore you would just put a 1 million multiplier on your money anyways. And putting 1 million multiplier on 1 million dollars is enough to become a trillionaire anyways
At 3% interest, you double your money every 23.4 years, how many 23.4 years do you have?
That's why it's smart to park money in high-interest assets (like index funds). Of course, you need to be in a position to save money.
And in a position to be able to lose it. High interest are high because they are risky, so they have to pay well to attract investing. If you already have enough money to burn, you can put money into various high risk areas and win overall. If you only have enough to sink it into a single source, you could gain. Or not.
That's the angel investor strategy.
There's also lower risk index funds, that simply invest in the biggest N companies.
As long as you keep that money in index funds like MSCI World, S&P500 or DAX, you can wait out the bad times. Never sell, keep holding. Over decades this leads to large net profits.
Yeah, I had to go down to 3% for it to even make sense.