Monday, January 23, 2006

Financial Literacy, Investing 101

It appears that many bloggers are linking to "It Is What It Is." (Unfortunately, access has been restricted. So here's the same information courtesy of The Big Picture.) The topic is compound interest. The chart is a classic for teachers to use. It assumes a 10% return on investment. And it makes a powerful statement for investing as early as possible.

Some people point out that it does not take into account the effects of inflation. Granted, but then you "inflation adjust" your contributions. Show this to your students. I suspect you'll get the attention of a few of them.

Let us know how it goes.

Posted by TSchilling at January 23, 2006 3:35 PM

I like the idea that endowing each infant with the capital of a half a years income at birth would be sufficient to provide for their entire retirement.

Posted by: Lord at January 23, 2006 6:24 PM

I linked to it as well, but I saw it at Barry Ritholtz's site. Anyway, the comments section has been quite active.

Posted by: William Polley at January 25, 2006 8:48 AM

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