This newsletter is a very exciting one. It marks an end of month, end of year, and end of decade. The results of all 3 markers are overwhelmingly positive. The month is up 2.22%. The year is up 21.28%. The decade is up 283.48%. Those numbers are very nice. Despite the chaos in the world, if you had held on to an investment for the entire time, your patience would have been extremely lucrative.
The 1st topic of this newsletter will be the power of Compound Interest. If you were to deposit 100 dollars each month under your mattress, after 50 years, you would have $60,000. If you were to deposit that money each month into a bank, then assuming you earn 2% on your interest you would have $102,961.20 after 50 years. The Dow over the last 35 years has returned 9.3% per year. Assuming that level of growth continues, if you invest 100 dollars per month into the Dow, after 50 years you would have $1,312,604.89. The difference in wealth created due to a few percentage points is massive. Regardless of how much money you have now, proper and diligent investing can set you up for a very comfortable retirement.
The 2nd topic of this newsletter will be how to use the information we discussed above to give you a good retirement. The first thing that should be understood is that money that is not invested is not helping you build wealth. You may need it for liquidity reasons or peace of mind, but non invested funds will not bring you wealth. It does not have to be invested in stocks. You can invest in bonds, real estate, etc. The point is that in order to win the game, you need to play it. The second thing that must be understood is that a small amount of money can accumulate into a large fortune if given enough time. We want you to think very carefully about your monthly expenses. If you are able to trim your monthly expenses even by a little bit, that could be the difference between a financially secure and financially insecure retirement. We, of course, are not telling you to live a life of joyless austerity and frugality, but it is to your benefit to be careful with your funds and think twice before spending once.
If you have any questions about your investments, please call at any time. We sincerely hope you got value from this newsletter. We appreciate your business and trust.
Dan and Eli
As I’m writing these to help my readers, I would be very appreciative of any input in regards to what I should write next. If you want me to write about a particular topic, please contact me. Please contact me if you would like to submit a post to my blog.
If anything that I mentioned above interests you, please consider downloading my free e-book. The book contains my thoughts on investment management and some information that I think everyone should know. You can also download it below.
Questions for the comments
Did my newsletter make sense? Do you agree or disagree with what I said?