Transcript

Exponential Growth and How it Can Help You Retire Sooner

EXPONENTIAL GROWTH AND HOW IT CAN HELP YOU R ETIRE SOONER EXPONENTIAL GROWTH: Growth rate becomes ever more rapid in proportion to the growing total number or size. A PHYSICAL EXAMPLE: A PIECE OF PAPER: .1MM THICK, FOLD IT TO SEE EXPONENTIAL GROWTH. 3 FOLDS: 7 FOLDS: 10 FOLDS: 17 FOLDS: AS WIDE AS YOUR FINGERNAIL AS THICK AS A NOTEBOOK THE WIDTH OF HEIGHT OF A 2 STORY HOUSE YOUR HAND 30 FOLDS: 50 FOLDS: 60 FOLDS: 100 FOLDS: THROUGH THE THE DISTANCE FROM THE SIZE OF THE EARTH'S ATMOSPHERE SUN TO EARTH RADIUS OF THE SOLAR SYSTEM KNOWN UNIVERSE IT WORK S WITH MONEY TOO: DOUBLE A PENNY EVERY DAY FOR A MONTH: CUMULATIVE AMOUNT: DAY 1 DAY 5 DAY 10 ° * DAY 15 * DAY 20 DAY 25 DAY 30 $.01 $.31 $10 $327 $10,485 $335,544 $10,737,418 WE SEE EXPONENTIAL GROWTH IN TECH: MOORE'S LAW: KRYDER'S LAW: EVERY 18 MONTHS, THE PROCESSING POWER YOU CAN SQUEEZE ONTO A THE DENSITY OF HARD DRIVES DOUBLES COMPUTER CHIP DOUBLES. EVERY 13 MONTHS THE ABILITY TO STORE MORE EFFICIENTLY HAS RESULTED IN MUCH CHEAPER STORAGE COST OF A GIGABYTE OVER TIME: 1981 1987 1990 1994 1997 $300,000 $50,000 $10,000 $1,000 $ 100 2000 2004 2010 2014 $ 10 $1 $. 10 $.026 HOW YOU CAN APPLY IT TO YOUR MONEY: THE RULE OF 72: IN ORDER TO APPROXIMATE THE NUMBER OF YEARS IT TAKES TO DOUBLE AN INVESTMENT, DIVIDE THE GROWTH RATE INTO 72. EX. JF AN AMOUNT IS GROWING BY 10% PER PERIOD, IT WILL TAKE APPROXIMATELY 7.2 PERIODS (72 DIVIDED BY 10 = 7.2) TO DOUBLE. COMPOUND INTEREST = EXPONENTIAL GROWTH THE POWER OF INTEREST RATE: YEARS IT WOULD TAKE UNTIL INVESTMENT DOUBLES: 1% INTEREST 72 YEARS 2% INTEREST 36 YEARS 4% INTEREST 18 YEARS 6% INTEREST 12 YEARS 8% INTEREST 9 YEARS 10% INTEREST 7.2 YEARS US STOCKS HISTORICALLY COMPOUND ANNUAL RETURN OF 8%: $10,000 $9,321 INVEST $2,000 $8,000 $6,344 $6,000 $4,317 $4,000 $2,938 WITHOUT TOUCHING YOUR MONEY, YOU HAVE EARNED $7,321 $2,000 YEAR 1 YEAR 5 YEAR 10 YEAR 15 YEAR 20 $120,000 $ 108, 168 $2,000 INVESTMENT WITH $ 100,000 REGULAR CONTRIBUTIONS OF $2,000 PER YEAR: $64,933 $80,000 $60,000 $35,609 $40,000 $15,611 $4,320 BY INVESTING $2,000 PER YEAR, $20,000 YOU HAVE EARNED $68,169 YEAR 1 YEAR 5 YEAR 10 YEAR 15 YEAR 20 COMPOUND INTEREST IS A POWERFUL THING. START INVESTING NOW, ENJOY LATER. Sources: raju.varghese.org/articles/powers2.html geekosystem.com/gigabyte-cost-over-years theregister.co.uk/2014/03/25/google_price_slash pcmag.com/encyclopedia/term/64169/kryder-s-law oxforddictionaries.com/us/definition/american_english/exponential-growth PRESENTED BY: ACCOUNTING-DEGREE.ORG bankrate.com/calculators/savings/compound-savings-calculator-tool.aspx life123.com/parenting/education/math-activities/exponential-growth-facts.shtml arborinvestmentplanner.com/what-is-exponential-growth-double-time-and-the-rule-of-72 DEVELOPED BY N NOWSOURCING heartlandfunds.com/individual-investors/Heartland-Funds-Account-Resources/The-Rule-of-72.htm

Exponential Growth and How it Can Help You Retire Sooner

shared by NowSourcing on Apr 17
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This infographic takes a look at how exponential growth can help you retire sooner.

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