[extropy-chat] American Humanists Association 2004 conference report - complete!

[BillK]

On Wed May 12 10:19:39 MDT 2004 Robert J. Bradbury wrote:
> According to my handy dandy spreadsheet that I have here -- if you
> stick $5000 into a reasonable mutual fund earning ~6% after inflation 
> (reasonable given historic long term stock market returns) when you
> are 21 then by the time you hit 130 years you are a 
> multi-millionaire. And this doesn't even take into account increased
> living standards due to nanotech development over the next 130 years.

Wow! I bet we all wish we had a calculator like that!
Unfortunately real life spoils such optimistic calculations. I think you
need to take some of Eugene's pessimism pills (tm) before you rely on
this investment strategy.

Do some googling on inflation-corrected indexes and you will find that
the inflation-corrected S&P 500 Index shows a compound annual return of
1.46 percent per year over the 125 years from 1871 to 1996.
<http://www.cpcug.org/user/invest/charts.html#InflCorr>
<http://www.cpcug.org/user/invest/secular.html>
The tech boom / bust probably hasn't changed the longterm average much.

I have always tried to tell people that compound interest is the most
powerful force in the universe, but they mostly don't appreciate the
significance. Although Warren Buffett and Einstein do!
<http://www.buffettsecrets.com/compound-interest.htm>

Compounding is a bit like the arrival of the Singularity. It starts off
very slow, but as capital accumulates the annual increments get larger
and larger with huge increases in the final years.

But if you can get 2% or 3% per annum long-term growth above inflation
you are doing well. Especially as pension investments are recommended to
be put in very secure (= boring) investments.  No point in racking up
huge gains in speculative investments, then losing it all and having no
pension fund. But you do need asset-backed investments in case the
government decides (accidently or on purpose) to ruin the currency.

After nanotech arrives, you are probably in the Singularity era, when I
doubt if oldtime investment theory and schemes will still apply.

BillK