Fun with Numbers and Retirement Bliss

Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn’t ... pays it.
— Albert Einstein

Please refer to Important Disclosure Information at the end of this research note.

According to a new survey by the Insured Retirement Institute (and reported on by CNBC), 15% of millennials believe that winning the lottery is a “viable retirement strategy.”

Here’s another sobering piece of news:  social security recipients won’t get a cost of living increase in 2016 (in the WSJ and in the Washington Post).


Causality anyone?

  1. Personal Finance is not a core requirement in most U.S. colleges.  
  2. Most working professionals believe retirement is a myth and they have to work longer, perhaps all their lives. 

Does one see causality?


Compounding - the 8th Wonder of the World

The simple truth is, given enough time and a sensible investment strategy, even a modest amount of yearly savings can compound into a large nest egg.  Warren Buffett demonstrated this elegantly by compounding his partnership money at 25%+ per year over a 10-year period.  A dollar invested in his partnership grew 10x in a 10-year period. Read more at Building an Efficient Portfolio of Quality Stocks.

Unfortunately, humans are not geared for compound math so Einstein’s profound quote (at the top of this post) may be lost on most.

So we present some fun with numbers…


What if I saved $10 a day over 10 years?

You save $36,500.


What if I saved $15 a day over 15 years in an investment account growing 5% per year?

You save up a nice nest egg of $122,300.


What if I saved $25 a day over 20 years in an investment account growing 15% per year?

You save up a whopping $2,000,000.


Important Disclosure Information

Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Burr Capital LLC), or any non-investment related content, made reference to directly or indirectly in this research will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this research serves as the receipt of, or as a substitute for, personalized investment advice from Burr Capital LLC.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Burr Capital LLC is neither a law firm nor a certified public accounting firm and no portion of the research content should be construed as legal or accounting advice.  A copy of Burr Capital LLC’s current written disclosure statement discussing our advisory services and fees is available for review upon request.