After getting burned in tech stocks in 2000, I became an ultra-conservative investor. Gina and I have our savings in the very boring iShares Bond Index Fund, which plods along at a steady 5% return.
5% seemed really pathetic until I read this: if you invested a single penny at 5% back when Jesus was born, today you'd have a golden sphere a few hundred times the size of earth.
Sounds like an exaggeration, right? So this morning I tried it on my calculator. I typed 0.01 * 1.05, and I hit the equals sign 100 times. And then another 100, and another 100... watch this:
1 penny invested at 5% per annum
After 100 years..... $1.31
After 200 years..... $173
After 300 years..... $23,000
After 400 years..... $3 million
After 500 years..... $390 million
After 600 years..... $47 billion
After 700 years..... $6.2 trillion
After 800 years..... $811 trillion
You get the idea. Every hundred years, we're adding roughly 2 zeros. So after 2000 years, your penny invested at 5% is worth around $100,000,000,000,000,000,000,000,000,000,000,000,000.
What do I learn from this?

- 5% is an unbelievable return.
- No family has ever had a reliable 5% return for any extended period of time
- The current economic system is unsustainable. They say the stock market always returns 10% over the long haul? Baloney.