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Ep.714: A Quick Lesson From Warren Buffett
A QUICK LESSON FROM WARREN BUFFETT
If the Dow Jones Industrial Average, at 33,057 as of this date in early November 2023, compounds at 1.47% annually, what will its value be on Dec. of 2099? The end of the century - 76 years from now.
That would take the Dow to 100,000.
What if the Dow compounds at 4.6% annually?
That would bring the Dow to 1,000,000 by the end of the century. 1,000,000.
Now imagine that the Dow compounds at 7.8% annually. That would push the Dow Jones Industrial Average past 10,000,000 by Dec. 31, 2099.
That is still below its 8.4% average over the past 30 years.If we compound today’s 33,057 Dow at 8.4%, we get a Dow Jones Industrial Average at the end of the century over 15 MILLION.
Let’s put that in dollars. That means every $100 invested now (today) will turn into $45,943.64 in 76 years. Let’s say your child is 3 years old and you invest $200 a month or $2400 for the year and your child is 3. In 76 years or the end of the century that $2400 turns into $1,102,647.48 for them.
Those rates of return don’t include any boost from dividends. Also that is below the 9.8% the S & P 500 has returned over the last 30 years.
Lesson -Even at low to moderate rates of return over long periods of continuous growth turn small amounts into mountains of money. This is important for investors to remember.
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By Totally Irish Productions
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A QUICK LESSON FROM WARREN BUFFETT
If the Dow Jones Industrial Average, at 33,057 as of this date in early November 2023, compounds at 1.47% annually, what will its value be on Dec. of 2099? The end of the century - 76 years from now.
That would take the Dow to 100,000.
What if the Dow compounds at 4.6% annually?
That would bring the Dow to 1,000,000 by the end of the century. 1,000,000.
Now imagine that the Dow compounds at 7.8% annually. That would push the Dow Jones Industrial Average past 10,000,000 by Dec. 31, 2099.
That is still below its 8.4% average over the past 30 years.If we compound today’s 33,057 Dow at 8.4%, we get a Dow Jones Industrial Average at the end of the century over 15 MILLION.
Let’s put that in dollars. That means every $100 invested now (today) will turn into $45,943.64 in 76 years. Let’s say your child is 3 years old and you invest $200 a month or $2400 for the year and your child is 3. In 76 years or the end of the century that $2400 turns into $1,102,647.48 for them.
Those rates of return don’t include any boost from dividends. Also that is below the 9.8% the S & P 500 has returned over the last 30 years.
Lesson -Even at low to moderate rates of return over long periods of continuous growth turn small amounts into mountains of money. This is important for investors to remember.