Comments on: A Lesson On Compounding Interest For My Niece http://www.brokeass-student.com/a-lesson-on-compounding-interest-for-my-niece/ ... where my idea of splurging is feeding my cat Fancy Feast. As a full-time student with a limited income stream, follow my journey in obtaining financial awareness and prosperity Thu, 28 Aug 2008 02:56:35 +0000 http://wordpress.org/?v=2.1 By: Jenn O http://www.brokeass-student.com/a-lesson-on-compounding-interest-for-my-niece/#comment-2097 Jenn O Wed, 08 Aug 2007 00:14:37 +0000 http://www.brokeass-student.com/a-lesson-on-compounding-interest-for-my-niece/#comment-2097 Except that this is compound interest at a required 100% return every year. So not the compound interest that most of us know. What do the numbers look like at 8%? That would be a more realistic picture (and still motivating, because if you start early, you are pretty much set for retirement). Except that this is compound interest at a required 100% return every year. So not the compound interest that most of us know. What do the numbers look like at 8%? That would be a more realistic picture (and still motivating, because if you start early, you are pretty much set for retirement).

]]> By: Dennis http://www.brokeass-student.com/a-lesson-on-compounding-interest-for-my-niece/#comment-2101 Dennis Wed, 08 Aug 2007 03:18:14 +0000 http://www.brokeass-student.com/a-lesson-on-compounding-interest-for-my-niece/#comment-2101 I wish my parents invested for me, geez! I wish my parents invested for me, geez!

]]> By: Jon http://www.brokeass-student.com/a-lesson-on-compounding-interest-for-my-niece/#comment-2110 Jon Wed, 08 Aug 2007 14:51:56 +0000 http://www.brokeass-student.com/a-lesson-on-compounding-interest-for-my-niece/#comment-2110 "If you were given $1.00 at birth and were able to double that dollar every year:" At first read that sentence is somewhat deceiving. I think you meant be able to double that dollar plus all the profit you accumulated from it every year. (If you only double the original dollar every year your would only have less than $20 at the age of 15...) Compound interest is definitely one of the great wonders of the world. When I was 18 or 19 my stock broker told me that he had just had a grand-daughter born and with a modest $500 a month investment in her name, he figured he could make her a millionaire by the time she was 18 or 19 with average market performance. I wonder how well she is doing... BTW: I enjoy reading your blog. You seem to have accumulated quite the financial knowledge at such a young age. “If you were given $1.00 at birth and were able to double that dollar every year:”

At first read that sentence is somewhat deceiving. I think you meant be able to double that dollar plus all the profit you accumulated from it every year. (If you only double the original dollar every year your would only have less than $20 at the age of 15…)

Compound interest is definitely one of the great wonders of the world. When I was 18 or 19 my stock broker told me that he had just had a grand-daughter born and with a modest $500 a month investment in her name, he figured he could make her a millionaire by the time she was 18 or 19 with average market performance.

I wonder how well she is doing…

BTW: I enjoy reading your blog. You seem to have accumulated quite the financial knowledge at such a young age.

]]> By: Patrick http://www.brokeass-student.com/a-lesson-on-compounding-interest-for-my-niece/#comment-2222 Patrick Wed, 15 Aug 2007 22:06:20 +0000 http://www.brokeass-student.com/a-lesson-on-compounding-interest-for-my-niece/#comment-2222 The name of that tidy sum at age 65 is 18 quintillion. :) The name of that tidy sum at age 65 is 18 quintillion. :)

]]> By: SavingDiva http://www.brokeass-student.com/a-lesson-on-compounding-interest-for-my-niece/#comment-2611 SavingDiva Thu, 06 Sep 2007 18:02:54 +0000 http://www.brokeass-student.com/a-lesson-on-compounding-interest-for-my-niece/#comment-2611 I also wonder how Jon's stock brokers granddaughter is doing...a milllionaire at 19....I am a little jealous! I also wonder how Jon’s stock brokers granddaughter is doing…a milllionaire at 19….I am a little jealous!

]]> By: John Hunter http://www.brokeass-student.com/a-lesson-on-compounding-interest-for-my-niece/#comment-4460 John Hunter Sat, 22 Dec 2007 21:53:02 +0000 http://www.brokeass-student.com/a-lesson-on-compounding-interest-for-my-niece/#comment-4460 Compound interest was called the 8th wonder of the world by Benjamin Franklin. And you don't need anything close to 100% return to do amazingly well. <a href="http://investing.curiouscatblog.net/2007/06/09/fourteen-fold-increase-in-31-years/" rel="nofollow">The value of Real Estate in the United Kingdom increased by 14 fold (100,000 grew to 1,400,000) in 31 years</a>. Sounds amazing doesn't it? That actually is just a 9% annual rate of return with compounding working for you. Another way to look at it. $5,000 invested when a baby is born earning 18% (granted a very nice rate of return) would grow to nearly $100,000 on their 18th birthday. Compound interest was called the 8th wonder of the world by Benjamin Franklin. And you don’t need anything close to 100% return to do amazingly well. The value of Real Estate in the United Kingdom increased by 14 fold (100,000 grew to 1,400,000) in 31 years. Sounds amazing doesn’t it? That actually is just a 9% annual rate of return with compounding working for you.

Another way to look at it. $5,000 invested when a baby is born earning 18% (granted a very nice rate of return) would grow to nearly $100,000 on their 18th birthday.

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