Comments on: Understanding the Curvy Nature of Compound Interest

By: Zach @ Four Pillar Freedom

Zach @ Four Pillar Freedom — Fri, 15 Jun 2018 00:44:44 +0000

In reply to Kit. Kit, I'm stoked to hear that you have found the charts so valuable, thanks so much for the kind words :)

By: Kit

Kit — Wed, 13 Jun 2018 00:23:15 +0000

Zach,
I really love the charts you do. They really paint the picture of compound interest and the value of time. I notice your examples also use some pretty conservative numbers and small investment amounts (by my standards anyway). I think a blog like yours makes for great example for all those people who respond to FI discussions with the attitude that it isn’t possible.

I think your blog lays out the road map to retirement for the majority of the United States. Not everyone will achieve early retirement, but a couple maxing out their respective IRAs and having no other savings would still be able to retire comfortably (and in their late 50s early 60s if starting in their late 20s early 30s).

Great job, you’ve given me a lot of inspiration and I may have to extend your charts so I can make them work for my situation.

~Kit

By: Zach @ Four Pillar Freedom

Zach @ Four Pillar Freedom — Tue, 05 Jun 2018 19:09:07 +0000

In reply to Financial Panther.

Couldn’t agree more. I was the same way when I first started out – attempting to maximize investment returns and obsessing over trades rather than focusing on increasing my income and thus my savings rate, which is the one variable that matters most when you’re just starting out.

By: Zach @ Four Pillar Freedom

Zach @ Four Pillar Freedom — Tue, 05 Jun 2018 19:07:59 +0000

In reply to Dom @ Gen Y Finance Guy. I'll be sure to check out your article Dom, thanks for sharing!

By: Zach @ Four Pillar Freedom

Zach @ Four Pillar Freedom — Tue, 05 Jun 2018 19:07:26 +0000

In reply to Half Life Theory. Thanks, HLT! Glad you enjoyed this one :)

By: Financial Panther

Financial Panther — Tue, 05 Jun 2018 18:49:35 +0000

This is exactly what I tell anyone starting out – it doesn’t matter what happens in the beginning of your investing career because you have SO LITTLE invested in the grand scheme of things. The changes don’t matter at all.

You see so many people online talking about the minutiae of investing – wait for the market to go down, invest in X thing that gets X return, go for the homerun on some stupid stock – but its with such small numbers. 10% return in a year on 100k is 10k. 3% in a year on 100k is 3k. It’s a 7k difference – it doesn’t mean anything and doesn’t change your life!

But once the numbers get big, then you can start worrying about that kind of stuff.

By: Dom @ Gen Y Finance Guy

Dom @ Gen Y Finance Guy — Tue, 05 Jun 2018 18:02:35 +0000

+1 to HLF comment. Saving paired with a rapidly increasing income is a powerful force.

I wrote something along these same lines about how your savings rate and income growth are far more important when aiming to build wealth rapidly. Would be interested to get your input.

https://www.genyfinanceguy.com/2015/11/30/savings-rate-important-variable-wealth-building-math-prove/

By: Half Life Theory

Half Life Theory — Tue, 05 Jun 2018 13:25:57 +0000

Wow, this paints a very accurate financial picture for those just starting out in the stock market. Don’t be too concerned about getting all your investment choices right, just focus on contributing as much as possible. That’s a really vivid take away from your illustrations.

What I’ll add is, the more you make, the more you can shovel away. I think focusing on increasing income at an early age will be very important as well, and shouldn’t be taken for granted.

Awesome post!