Business Insider: Every 25-Year-Old In America Should See This Chart
The folks at JPMorgan Asset Management demonstrate the true power of compound interest in their 2014 "Guide to Retirement."
The chart is frickin' awesome! Wow! Just look at that money grow! I'm especially impressed with Susan's performance! $50,000 turns into $602,070? In today's low interest rate environment, she must be planning on swinging for the fences! Kudos to her for taking on serious risk! Hope it works out for her!
The longer you wait to start saving for retirement, the more you miss out on the benefits of the incredible power of compound interest.
Indeed! Check out how fast money has been growing lately!
The following chart shows the national rate on a non-jumbo 12-month CD minus the inflation rate over the previous year.
Click to enlarge.
We'd generally want to see it above 0% in order for the money to grow in real terms, but there are a lotta things about Pee Wee compound interest we don't know anything about. Things we wouldn't understand. Things we couldn't understand. Things we shouldn't understand. We don't wanna get mixed up with a 0.2% nominal interest rate if we're trying to turn $50,000 into $602,070 (give or take a few pennies)!
Put $5,000 in there and a year from now we'll have earned what, a whopping $10? We might be tempted to use that $10 to help pay next year's health insurance premiums. We can't do it though. The "incredible power of compound interest" won't work if we spend the interest! We must not only let it ride, but add another $5,000 to it! It's the JPMorgan Asset Management growth miracle at work!
Isn't our new and improved financially innovative economy wonderful?
I offer a special thanks to JPMorgan Asset Management for supplying such a wonderfully optimistic chart. There's nothing quite like an excellent hindsight analysis of a nearly forgotten era of higher interest rates to generate a smile and a chuckle. Good times.
It might seem crazy what I'm about to say
Sunshine she's here, you can take away
I'm a hot air balloon, I could go to space
With the air, like I don't care baby by the way
In all seriousness, over 110,00 people dislike that song? I feel a bit sorry for these people. It's got a good beat. He's got a pleasant voice. It does make me happy just hearing it. That said, it is possible to be happy and still be very concerned about our long-term future though. Go figure.
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