Quote:
Originally Posted by GMZ
Sorry but I just cant let this fly, not saying not to save but compound interest with the monetary system we have now is an illusion.
Compound interest huh? How about compound inflation? Will that $3M buy what it could at retirement as it did when the person started saving? No way!!
47 yrs ago a dollar went a long way, now not so much. Why? Weve had inflation almost EVERY year since the damn 30's that why.
Theres a huge difference between nominal returns (on paper) and real returns (purchasing power after inflation). Can I get some real deflation please!  |
Compound interest is not an illusion. Of course inflation is an issue but that existence of inflation, whatever the level, doesn't invalidate the example.
I would certainly hope that people would save a lot more than just $100/month but the overall point was that it doesn't take starting out with a huge pile of cash to wind up with a huge pile of cash and the earlier you start the better...it also serves to identify the real cost of financing something...the cost of financing a new vehicle; especially what is essentially a toy for most people, is far more than just the sum of the payments.
Financing modifications to a vehicle that will generally make an already rapidly depreciating asset depreciate even faster is like holding up a big red sign begging Murphy to pay you a visit.
The real cost of financing a vehicle gives the slogan "like a rock" a whole new perspective.
