{"id":1304,"date":"2023-07-21T19:49:30","date_gmt":"2023-07-21T19:49:30","guid":{"rendered":"https:\/\/robdix.com\/?p=1304"},"modified":"2023-07-21T19:49:32","modified_gmt":"2023-07-21T19:49:32","slug":"compounding","status":"publish","type":"post","link":"https:\/\/robdix.com\/compounding\/","title":{"rendered":"Compound interest is over-rated"},"content":{"rendered":"\n
When people wax lyrical about the power of compounding, they like to tell an 11th century story about a clever inventor who asks the king to pay him by placing one grain of rice on the first square of a chess board, then doubling it on each successive square. The king laughs at what a great deal this is\u2026 not realising that after 64 doublings, he will owe eighteen quintillion grains of rice.<\/p>\n\n\n\n
A more modern (and actually true) story that\u2019s often used to make the same point is that Warren Buffet \u2013 one of the wealthiest people in the world with a net worth of some $114 billion \u2013 made 95% of his wealth after the age of 65, even though in recent decades he\u2019s not done much other than sit around reading and drinking Cherry Coke.<\/p>\n\n\n\n
But for most of us, compounding won\u2019t be the answer to all our financial prayers. <\/p>\n\n\n\n