In my April 30 column I said that if Bill Gates had invested merely one-millionth of a penny at 5% a thousand years ago, he’d have had $15 billion today. Of course, he has a lot more than $15 billion, but that is not the point. The point is: Could that possibly be correct? Could I possibly have calculated that right?
Sheepishly: no. Thanks to John Ebert for pointing this out. “I think you meant ONE-BILLIONTH of a penny,” John writes. And indeed he is right. I was not overestimating the power or compound interest but, rather, underestimating it — a thousand-fold. Had Bill invested the millionth-of-a-penny at 5% as I posited, he’d have $15 trillion today, which actually is more than he has — indeed, it is actually about double America’s gross domestic product.
It all comes back to Mary Poppins, doesn’t it? (“When you invest . . . your . . . tuppence in the bank . . . safe . . . and . . . sound . . . Soon that tuppence . . . safely . . . invested in the bank . . . will comPOUND!”) HOW CAN YOU LEAVE THE TV ON WHEN YOU’RE NOT WATCHING IT AND WASTE PENNIES OF ELECTRICITY THAT COULD BE WORTH BILLIONS TO YOUR GREAT-GREAT-GREAT-GREAT GRANDCHILDREN?
(In case you missed it, this all pretty well ties into yesterday’s column.)
Quote of the Day
The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.~H. L. Mencken
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