3 ms·
"The greatest shortcoming of the human race is our inability to understand the exponential function." --Albert Allen Bartlett Considering that 97% of the surve
by gspetr 11y ago
"The greatest shortcoming of the human race is our inability to understand the exponential function." --Albert Allen Bartlett
Considering that 97% of the survey participants allocated their debt payments in financially suboptimal ways, perhaps the second greatest shortcoming of the human race is our inability to understand the compound interest.
"Put God in your debt. Every stroke shall be repaid. The longer the payment is withholden, the better for you; for compound interest on compound interest is the rate and usage of this exchequer."
--Ralph Waldo Emerson, Compensation,' Essays, First Series (1841)
- pc86 11y agoPaying off debt in the way that saves you the most interest over multi-year timeframes may be optimal financially but is not necessarily optimal psychologically or logistically. If you've got a 2% debt you can pay off in 6 months to open up $200/mo in cash flow that may be better psychologically than plugging away at $80k in student loans that are 4/5/6%. Yes 50 years from now you will have slightly less money. Suboptimal does not mean wrong.
- tamana 11y agoCompound interest == exponential function. Not understand that is our greatest shortcoming :-)