4 ms·
Yes, of course! Slip of the orders of magnitude. Hard to believe, but true. Compound interest/inflation - the most powerful force in the universe (see Einste
by mikhailfranco 3y ago
Yes, of course!
Slip of the orders of magnitude.
Hard to believe, but true.
Compound interest/inflation - the most powerful force in the universe (see Einstein). For good (interest) and ill (inflation).
All those investment advisors never mention the real interest rate, which is the key factor (and famously hard to measure, after all the Goodhart's Law shenanigans of govt and central banks manipulating RPI/CPI core/not and TIPS/breakevens).
- eru 3y agoCompare https://slatestarcodex.com/2014/05/26/compound-interest-is-the-least-powerful-force-in-the-universe/ https://slatestarcodex.com/2014/05/26/compound-interest-is-t... I don't think the real interest rate is that hard to measure. You don't have to pick your local government's favoured measure of inflation, just pick your own. Eg in the long run you could pick the Big Mac index. Or you could pick some other country's official price level measure and multiply it by the exchange rate with their currency. (In the short run, you have different real price levels between countries, but perhaps they even out in the long run.)