Using a 6% rate of return (considering historical 9% return for stock index) and 55 years old as the end year with an initial starting capital of $10,000, here are the differences in return:
At 55 years ...
...Earlier in part 1, we have discussed about how inflation has been eroding our wealth, while the stockmarket has proven to generate a much higher return in the long run. Some may say that with the current macroeconomic environment, inflation is not that high and it might be safer to put in fixed deposit with the bank. They will want to wait till they got much older and with more capital before they start investing. While there's nothing wrong with that, the younger one starts, the better one can enjoy the effect of compounding interest. Warren Buffet who started an age of 11 in fact thought that he should have started even earlier.
