Archive for February, 2011


Time and Choice

February 2, 2011

I wrote the following on my Facebook business page last night (

Due to the magic of compound interest: if you have two 22-year-olds earning 12% on their money, the first contributes $2,000 annually for the first 7 years and the second contributes the same amount for the next 37 years – they both end up with $1,200,000 at age of 65.

I don’t know what else needs to be said here other than time cannot be made up by extra deposits. $2000 a year is only $167 dollars a month. How much is your cable? What would you rather have at the end of the day: nothing (maybe some good shows which you can download or stream for a fraction of the cost) or 1.2 million. Its unfortunate that most people will say cable. I don’t have cable. With all the free access to stuff online why the hell would I pay 166 dollars a month so I can sit 5hrs a day in front of Jerry Springer. I would rather have 12% (or even 5% or 8%) growth than 100% loss.

It’s doubly unfortunate, and I’m not mocking, that most people don’t think they can ever achieve that kind (or proportionately similar amount) of income. It’s just a matter of putting money into a well diversified, protected, and properly managed financial plan and waiting “x” amount of time.  We accept limits much too easily I believe. Our limits are defined by our belief and nothing else; and our habits become dictated by that belief. It’s a human failing to accept the comfort of resignation over the assumed anxiety of effort. We should be putting the same sensibility to our financial health. The ‘wait-and-see’ attitude frankly takes way too much time. Act now and talk about a plan with your advisor. It is exciting and fun to see the possibilities that arise when you simply tweak a few lifestyle decisions. You actually have more money through a plan; you are not sacrificing your weekly coffee (unless its three a day). Discipline reveals your dreams; and, in this case, does not need to exist for long. Time and choice are not scary, they are opportunity.