10 million a year for 100 years is probably a better way for people to understand that kind of wealth. Because even 1000 years is almost too long for our brains to comprehend.
To each their own. I can’t imagine what I would do with anything more than a million dollars a year. 1,000 years ago America had just barely been discovered by Erik the Red, so fast forward 1,000 years where we’ve cured all cancer, no one burns gas anymore, we’ve colonized two other planets, and made contact with three alien species. My $1 billion hoard (inflation adjusted) just ran out.
That’s assuming your interest rate is higher than inflation, which it typically is not. Even when it is, like (debatably) now, it’s not that much higher. Over time, you’re losing money without spending a cent.
Now, if you invest in some ETFs you might be able to keep going for a while, but there’s the chance that the market crashes and stays down long enough that you run out. That’s pretty unlikely though, especially if you get a few good years to grow that egg before any crash happens.
It wouldn’t be that difficult to live off that investment, but a savings account and interest would not suffice.
I like to describe it as, you could live off of $1M a year… for 1000 years.
10 million a year for 100 years is probably a better way for people to understand that kind of wealth. Because even 1000 years is almost too long for our brains to comprehend.
To each their own. I can’t imagine what I would do with anything more than a million dollars a year. 1,000 years ago America had just barely been discovered by Erik the Red, so fast forward 1,000 years where we’ve cured all cancer, no one burns gas anymore, we’ve colonized two other planets, and made contact with three alien species. My $1 billion hoard (inflation adjusted) just ran out.
Thanks to compound interest, you can live off anything more than $4M for infinity years
That’s assuming your interest rate is higher than inflation, which it typically is not. Even when it is, like (debatably) now, it’s not that much higher. Over time, you’re losing money without spending a cent.
Now, if you invest in some ETFs you might be able to keep going for a while, but there’s the chance that the market crashes and stays down long enough that you run out. That’s pretty unlikely though, especially if you get a few good years to grow that egg before any crash happens.
It wouldn’t be that difficult to live off that investment, but a savings account and interest would not suffice.
Compound interest doesn’t exclusively refer to bank interest. Investments beat inflation regularly.