It cracks me up that compound interest gets raised every time someone makes an argument about just how much money billionaires have. As if the only reason we’re not billionaires is because we were too dumb to invest the $5,000 we’ve been making every day since Columbus sailed the ocean blue.
Today “compound interest” usually relates to reinvested dividends and amortized growth/appreciation of investments (e.g., stocks, bonds) simply because non-predatory loans are designed for payoff within some fixed term. So if the term “compound interest” applies, something unexpected is happening (e.g., default) and the loan will be bundled and sold at a discount to collections.
Not far enough back to make a difference I’d wager
I’ll take that wager! $5k daily, or $15283 monthly, compounding quarterly, ignoring inflation, at 10% annualized ROI:
… in 100 years becomes ~86 billion
… in 200 years becomes ~1,817,426 billion
… in 300 years becomes ~38,406,599,775 billion
… in 533 years becomes ~8.11624 x 1023
If that sounds incredible to you, you’re not alone. It’s the result of a hyperbolic growth curve that starts slow but keeps accelerating indefinitely, and 533 years is a very long time in market term, so you easily reach the silly-numbers range.
Lol you’re right! It looks like the final number I gave was only for 400 years. I didn’t actually reach 533.
Also I was rounding numbers midway through like a pen and paper physics computation. Since that error scales exponentially, even if I had gotten to 533 the final number was guaranteed to be off.
No it isn’t because it’s an imagery used to show how absurd that amount of money is. 5000 a day is easy to grasp and a few hundred years is easy to grasp.
I feel like compound interest would be important here
It cracks me up that compound interest gets raised every time someone makes an argument about just how much money billionaires have. As if the only reason we’re not billionaires is because we were too dumb to invest the $5,000 we’ve been making every day since Columbus sailed the ocean blue.
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That’s real nice and all but curiously, nobody ever says that.
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When did compound interest even get invented?
Not far enough back to make a difference I’d wager
Edit: Compound interest when charged by lenders was once regarded as the worst kind of usury and was severely condemned by Roman law and the common laws of many other countries.
Well…shit…
Today “compound interest” usually relates to reinvested dividends and amortized growth/appreciation of investments (e.g., stocks, bonds) simply because non-predatory loans are designed for payoff within some fixed term. So if the term “compound interest” applies, something unexpected is happening (e.g., default) and the loan will be bundled and sold at a discount to collections.
I’ll take that wager! $5k daily, or $15283 monthly, compounding quarterly, ignoring inflation, at 10% annualized ROI:
… in 100 years becomes ~86 billion
… in 200 years becomes ~1,817,426 billion
… in 300 years becomes ~38,406,599,775 billion
… in 533 years becomes ~8.11624 x 1023
If that sounds incredible to you, you’re not alone. It’s the result of a hyperbolic growth curve that starts slow but keeps accelerating indefinitely, and 533 years is a very long time in market term, so you easily reach the silly-numbers range.
DAMN YOU AND YOUR MONSTER MATHS!
100% agree with the point you’re making and 100% disagree with the math that you did to get there.
Lol you’re right! It looks like the final number I gave was only for 400 years. I didn’t actually reach 533.
Also I was rounding numbers midway through like a pen and paper physics computation. Since that error scales exponentially, even if I had gotten to 533 the final number was guaranteed to be off.
even $1 at 1% compound interest gets ridiculous after a hundred years
$2.70
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look it up and let us know, we’d like to get the math done :)
No it isn’t because it’s an imagery used to show how absurd that amount of money is. 5000 a day is easy to grasp and a few hundred years is easy to grasp.
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