Right now, the world's economy is growing about 4% per year. This is phenomenal, with consequences that reach beyond us for centuries. It's part of the miracle of capitalism: compound growth, sometimes 4% and sometimes less, almost every year. In the long history of the human race, and in the longer history of this planet IT IS UNPRECENDENTED. It's been going on for only 300 years. How long can it continue? No one knows, although environmental limits will impose themselves perhaps within our lifetimes. That will be a new game indeed!!!

Right now, as an individual, how can you take part in this miracle? One way is by becoming a (little) capitalist yourself. This means saving money and investing . Here are some examples of investments:

Two key questions will help you decide among all these interesting choices: when do you think you'll spend (need to spend) the savings (paying for college, buying a car, buying a house, providing retirement), and how much risk can you take and still sleep good at night? Health is invaluable and damaging your peace of mind and health with worry about investments is a BAD idea. So, learn for yourself what your comfort level is. Basically, if you don't need the money for a long time and you can take gut-wrenching drops in the market, you're better off with the riskier investments (growth stocks, technology stocks, mainland Chinese stocks, Mexican stocks, etc.).

What's the reward?

The table below shows the rewards for patient investing. It shows what, at various interest rates, investing one dollar per month will produce starting at three ages (25, 35, 45) and ending at age 70. The table assumes that the annual (nominal) interest rate is I and that interest is compounded monthly; the formula for the total savings (with interest) is

N is the number of months; x=(1+I)/12; total savings = x*(1-xN)/(1-x)
If you want "real dollars", discounted for inflation, subtract an estimate for the inflation rate (J) from I (so use I-J instead). If your investments involve interest, dividends, or frequent buying and selling, you need to reduce I-J further to account for all the taxes you pay on your investment income.
The Boring Art of Investing Regularly
I as a decimal $1 monthly, Age 25 to 70  $1 monthly, Age 35 to 70 $1 monthly, Age 45 to 70
.01 682 503 340
.02 876 609 389
.03 1143 743 447
.04 1514 917 516
.05 2035 1141 598
.06 2770 1432 696
.07 3815 1812 815
.08 5310 2309 957
.09 7460 2964 1130
.10 10570 3828 1338
.11 15085 4973 1591
.12 21669 6495 1898
.13 31303 8523 2271
.14 45444 11233 2727
.15 66263 14861 3284
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