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Power of Compounding, Munger on Reading & More
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Power of Compounding, Munger on Reading & More

ChooseFI·Brad Barrett·about 1 month ago
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I’ve followed the news this week about the Invest America Accounts (‘Trump Accounts’) and no matter what you or I think about the politicians involved, if someone from the FI Community were to design a plan to make Americans wealthy, it would be hard to do better than a loose framework of: Every citizen having a long-term permanent investment account funded from birth with low-cost index funds being the default option. For fun, I went to a compound interest calculator to see what we’d have to invest monthly to have a $5,000 monthly income stream from our investments at age 70 (when you’d normally max out your Social Security benefits). To assume this $5,000 monthly income stream, that means you’d pull $60,000 per year from your investments. Using the 4% rule of thumb, if you had $1,500,000 you could withdraw $60,000 annually, so we are solving for the monthly contribution at different investing age starting points to reach $1.5 million.…

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