Quotes to Live By

Too much prosperity makes men greedy and their desires are never controlled sufficiently to stop at the point of attainment. Seneca

The whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts.” Bertrand Russell, philosopher, mathematician, author, Nobel laureate (1872-1970)

They are my two favourite quotes. Both are cornerstones of my life philosophy.

Another recent favourite is an Anthony Robbins quote, or at least a modern maxim attributed to Robbins.

Once you have mastered time, you will understand how true it is that most people overestimate what they can accomplish in a year – and underestimate what they can achieve in a decade!

How do these quotes fit in with investing? If you were wondering that, then maybe you should consider sticking to index funds.

Time is the key to compound returns.

I saw a snippet of TV last night. An Australian medal collector was being interviewed about selling his collection. The collector, the interviewer and my partner were all gobsmacked that a medal he bought for $15,000 in 1981 was now estimated to be worth a cool quarter million. Wow that’s incredible my partner said.

Do you think that’s a good return?

Here is how to quickly figure it out. Don’t tell me partner how easy this is, she convinced I’m a walking talking mathematical genius.

1. Figure out number of years. 27 years
2. Figure out how many times you need to double the $15k to get to $250k. 15->30->60->120->240. SO it takes four doubles.
3. Divide 27 by 4. Almost 7.
4. Divide 72 by 7. A bit over 10.

And that is your very rough answer. It is rough return of around 10%. Due to the rounding the actual answer is 10.98%, but then he’ll need to pay auction costs so around 10% is probably right. Not too shabby, but certainly nothing to get excited about.

For those still getting up to speed on their finances and investing. One of the first things you must understand is compounding and the number 72. Feel free to ask any questions. I’m here to help.

Do you have any great quotes to live by?

Cheers
Dean

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