16/10/2020
“Compound interest is such a powerful tool that Albert Einstein once called it the most important invention in all of human history [...]
William got a jump-start on his brother, opening a retirement account at the age of 20 and investing 4000$ annually for the next 20 years. At 40, he left the money to grow in a tax-free environment at the rate of 10 % each year.
James didn’t start saving until the ripe old age of 40, just as his brother William stopped making his own contributions. Like his brother, James invested 4000$ annually, also with a 10% return, tax free, but he kept it until he was 65 - 25 years in all.
William: 4000$ x 20= TOT invested 80,000
James: 4000$ x 25= TOT invested 100,000
Both at 10% compound return
At 65 years old:
William, the brother who’s gotten the early start and stopped saving before his brother had even begun, ended up with almost 2.5 million. James, who’d saved all the way until the age of 65, had less than 400,000$. That’s a gap of over 2 million!”
The brother who’d started sooner and invested the least money has performed 600% more
From: “Money, master the game” by Tony Robbins
