Sunday, December 28, 2008

I'm already a ways behind Buffett. Sigh.

I recently had my 27th birthday. By 27, Warren had the inflation-adjusted equivalent of $1 million. I do not. That's okay though -- I figure if I can keep up with 1% of his wealth I'll be doing alright, right? ;) Let's see -- 1% of $50 billion....carry the one...yes that should do nicely as a goal.

In my favor though, by now Warren how to buy a house and support a wife and new kid. By contrast, I will finally be a DINK (dual income no kids) in a cheap apartment. In addition, if the market crashes as I expect it to, I will have a double whammy of a large return on that crash plus more money available to buy stocks at historic lows in time for the turnaround.

I continue to maintain my own personal goal of compounding 25% per year every year. That sort of return will give you roughly a 10x return over 10 years. So $100,000 will turn into $1 million in ten years by returning 25% per year thanks to the magic of compounding. Likewise, $1 million would turn into $10 million, even with no additional savings.

No comments: