Investing – Don't Squander the Giant Advantages of Youth

The young have a one time opportunity to retire rich with just modest annual investments. They lose that opportunity if they wait until their 30s and 40s. So don't waste your opportunity.

Think about this – the long term average growth of the stock market over decades has been around 10 to 11%. That implies a doubling every seven years (some 7 year periods will be more; some less, but the average of several consecutive 7 year periods is a doubling every 7 years).

For illustration purposes, let's compare a 23 year old first time investor with a 44 year old first time investor. Each invests $1,000 a year in the stock market every year until age 65 and retires.

When the 44 year old retires at age 65, the 21 annual investments compound (double) three times over each 21 year period of time. Therefore, he/she collects $8,000 a year for 21 years in a row.

When the 23 year old retires at age 65, the 42 annual investments compound (double) six times over each 42 year period of time. Therefore, he/she collects $64,000 a year for 42 years in a row.

So the 23 year old first time investor collects 8 times more than the 44 year old first time investor and does so for an additional 21 years than the 44 year old investor.

Note that if you double the annual investments to $2,000 a year, the results jump to $16,000 a year for the 44 year old and $128,000 a year for the 23 year old. $5,000 annual investments result in $40,000 a year of the 44 year old and $320,000 a year for the 23 year old

This same principle of compounding can be applied to babies. Invest $1,000 in a newborn baby, and there will be nine 7 year periods of compounding by age 65. A one time investment of $1,000 for a newborn, doubles 9 times to $512,000 by age 65. A one time $2,000 investment grows to over one million dollars, and a $5,000 one time investment grows to over $2.5 million dollars.

But you know nothing of the stock market and don't know what to invest in and how to manage it. Index funds like the S&P 500 (a market basket of the 500 largest companies) performs better than 70% of all mutual funds (the ETF “SPY” is a cheap way to buy that index). For many people, that's all you need to buy. Nothing eliminates risk but hundreds of companies are much, much less to go bankrupt than an individual company. Still want more diversity – buy the ETFs – MDY (S&P 400 Midsize companies) and SLY (S&P 600 small size companies), and also QQQ (Nasdaq 100 – top 100 Nasdaq stocks; more of a technology play). For additional diversity and balance, there are also “growth” and “value” versions of the S&P 500 indices - just put a “G” for growth, or a “V” for value at the end of them (SPYG, SPYV, SLYG, SLYV, MDYG, and MDYV). Finally, once bought, hold onto these stock market assets for decades without selling.

When retirement day comes, how do you wisely withdraw these assets during your retirement lifetime for living expenses without running out of money? If you plan on making annual withdrawals, then withdraw no more that 4% of the value of the assets at the time of withdrawal. If you plan to make monthly withdrawals (recommended so that you are less impacted by stock market fluctuations in value day in and day out), then withdraw one third of 4% each month (.0033 times the total value of your assets). Such a process will give you the money you need plus likely give your "raises" in withdrawals as time goes by.

Nuclear Power and Waste and Environmentalists

We need to stop being blindly stupid about and against nuclear material and especially nuclear waste. We have uranium and also nuclear waste and likely always will. We need safe storage places for them. Right now they are kept at dozens of nuclear facilities, which isn't a safe way to store such material, are too limited in storage space, and makes them targets for terrorist attacks. The Federal government has already spent 15 billion dollars preparing the Yucca Mountain region in Nevada for nuclear storage because its terrain makes it a very safe, logical choice to store nuclear waste for hundreds of years, plus having most of our nuclear waste there makes it is easier to guard against terrorists. Also, advances in nuclear power plants have made it possible to utilize the expired fuel rods of old nuclear plants, thus reducing radioactive nuclear waste by over 90% from those nuclear rods. It is this same blind stupidity by environmentalists against anything nuclear that has kept new nuclear plants from being built for over 30 years. Nuclear energy is currently the only non-fossil fuel energy alternative robust enough to provide all of our power plant needs to supply all our home and business energy needs. We could have been there by now except for environmentalists. Nuclear power plants have proven themselves very safe in the United States with few problems and all of them safely contained and prevented from impacting the enviroment. Advances in technology and safety procedures make new nuclear power plants even safer than the current old ones in the U.S.. So now, the nuclear power plants that we do have are old and thus reaching the end of their lifespans. They will have to be replaced by fossil fuel energy plants that environmentalists hate and blame them for global warming. See the absurdity here?

Doctor Visits

More and more, if a person has more than one medical issue, doctors are requiring their patients to make a separate appointment for each problem. That delays medical care, extends suffering, while lining the pockets of doctors. This practice needs to be outlawed.