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10% was an example to simplify the model. Achieving the same goal at a reduced return involves either putting more money in or waiting longer. It doesn't invali

by zrail 11y ago

10% was an example to simplify the model. Achieving the same goal at a reduced return involves either putting more money in or waiting longer. It doesn't invalidate the model.

mkozlows 11y ago
Saving for longer than 20 years already has a name, and it's called "saving for retirement."
pc86 11y ago
> 10% was an example to simplify the model. It also just so happened to quintuple his returns. Not exactly comparing apples to oranges when you have a 4% (realistic) v. 10% (unrealistic) return built into the model.
reitzensteinm 11y ago
Assuming 10% risk free return is more like designing a tank and assuming the armor is an order of magnitude stronger than it is. First, let's cover the tank in 10mm of it, which will give us all the protection we need. Freeing up that much room gives us more space to put a bigger gun on it. After vastly reducing the weight, even more so because we don't need to carry as much fuel, we don't need tracks, because an 8 wheel variant gives sufficient traction. Oh, and since our new highly mobile and effective vehicle now costs a tenth as much, all the other expensive and slow vehicles taking on other roles in the army can be deprecated. In fact, let's design a variant that carries fuel. In this way, instead of having 50 tanks advancing 100km per day, we can have 500 of our new vehicles advancing 500km per day, with the same firepower and effective armor, completely overwhelming any opposition. Why has nobody figured this out before? OK, so, after we've taken the base assumption and followed the chain to its logical conclusion without error... we have nonsense. After realizing our mistake, and factoring in the real value for armor, our design and plans for reworking the army are absurd. "Waiting longer" at 6% means 82 years to achieve the same returns as 50 years at 10%. But if we include 2% inflation as well, 6% takes 97 years to match 50 years at 10%. One of those is planning for your retirement if you're young... the other is planning for that of your grandchildren.

by zrail 11y ago

10% was an example to simplify the model. Achieving the same goal at a reduced return involves either putting more money in or waiting longer. It doesn't invalidate the model.

mkozlows 11y ago

Saving for longer than 20 years already has a name, and it's called "saving for retirement."

pc86 11y ago

> 10% was an example to simplify the model. It also just so happened to quintuple his returns. Not exactly comparing apples to oranges when you have a 4% (realistic) v. 10% (unrealistic) return built into the model.

reitzensteinm 11y ago

Assuming 10% risk free return is more like designing a tank and assuming the armor is an order of magnitude stronger than it is. First, let's cover the tank in 10mm of it, which will give us all the protection we need. Freeing up that much room gives us more space to put a bigger gun on it. After vastly reducing the weight, even more so because we don't need to carry as much fuel, we don't need tracks, because an 8 wheel variant gives sufficient traction. Oh, and since our new highly mobile and effective vehicle now costs a tenth as much, all the other expensive and slow vehicles taking on other roles in the army can be deprecated. In fact, let's design a variant that carries fuel. In this way, instead of having 50 tanks advancing 100km per day, we can have 500 of our new vehicles advancing 500km per day, with the same firepower and effective armor, completely overwhelming any opposition. Why has nobody figured this out before? OK, so, after we've taken the base assumption and followed the chain to its logical conclusion without error... we have nonsense. After realizing our mistake, and factoring in the real value for armor, our design and plans for reworking the army are absurd. "Waiting longer" at 6% means 82 years to achieve the same returns as 50 years at 10%. But if we include 2% inflation as well, 6% takes 97 years to match 50 years at 10%. One of those is planning for your retirement if you're young... the other is planning for that of your grandchildren.