Thread by @davidhogg111

If you want to know one of the main reasons why the rich get richer look up compounding interest.

It’s easy to turn 10 million into 100 million

It’s basically impossible to retire when you live paycheck to paycheck and can’t invest early or at all to save for retirement.

Say you got 10,000,000 and you invest in some funds that average 8% annually even without adding anything to that for 30 years you end up with just over 100,000,000 *before taxes.*

Now let’s say you make 15 an hour work 40 hrs a week 52 weeks a year and magically pay no taxes - ( bare with me here)

You make $31,200

Say you work 30 years and somehow never have any medical or finical emergencies and save 10% $3120 of your income annually and invest it and av 8% annually. With an initial principle of $1000

After 30 years of having living expenses not above basically $28k (basically impossible also forget about having kids on that salary or *any* Financial or medical emergencies AND not even accounting for taxes)

You’d have about $370k

assume you retire at 65 and live 20 more years- you’ll have $18,500 to live off of annually for the rest of your life. So basically you can either keep working the rest of your life or die because social spending is “socialism”

*Keep in mind even in this imaginary world with no taxes, emergencies or children to raise and assuming you’re lucky enough to of made $15 an hour it’s still basically impossible to survive.

investor.gov/financial-tool… check the math for yourself and see how crazy compounding interest is

*also I’m NOT an accountant or a mathematician so call me out if my math is wrong*

Also this is the same thing but in reverse when you don’t pay off your credit card debt.

Pay off your credit card debt

Compounding interest SUCKS when used against you- when used for you with enough time it can make you a millionaire if you invest early enough.