Posted 12:03 am Sunday, October 07, 2012
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Compound interest yields long-term gains
By Nelson Clyde
isitjustme@tylerpaper.com
I heard a very educated man recently say change implies opportunity. Hopefully the opportunity will come for more sleep. It is clearly becoming dark earlier and we are just under the 30-day mark to go back to the real time God intended all of us to live in.
isitjustme@tylerpaper.com
I heard a very educated man recently say change implies opportunity. Hopefully the opportunity will come for more sleep. It is clearly becoming dark earlier and we are just under the 30-day mark to go back to the real time God intended all of us to live in.
So see, change does imply opportunity. He was right.
I was visiting with a friend last week who is old enough to remember some things which seem, well, almost extinct.
He was reminiscing about having a passbook savings account and the miraculous quality of compound interest. When was the last time you heard anyone mention compound interest?
You may have learned the rule of 72 in school. It was the simple method of dividing your interest rate into the number 72 to reveal how many years it would take to double your money.
For example, 72 divided by an interest rate of say 8 (percent) would equal nine years of time to double your money. With our current economy if you gained an interest rate of 1 percent it would then stand to reason it would take 72 years to double your investment.
These days it seems while earning 1 percent is awfully boring it is preferable to losing the value of your money in a more risky investment. That introduces a concept, which cannot be monetized, called the intrinsic value of a thing, such as sleeping well at night with the knowledge that Wall Street is not concocting another set of derivatives to extract one thousandth of a point return for some hedge fund which may render something you own less valuable.
Who can quantify the intrinsic value of sleeping well? Rip Van Winkle comes to mind as the appropriate person to compare a long period of sleep versus waiting 72 years for your original principal to double.
Too bad we can't figure out how to sell a good night's sleep. We couldn't man the phone banks with enough operators to keep up with demand.
He was reminiscing about having a passbook savings account and the miraculous quality of compound interest. When was the last time you heard anyone mention compound interest?
You may have learned the rule of 72 in school. It was the simple method of dividing your interest rate into the number 72 to reveal how many years it would take to double your money.
For example, 72 divided by an interest rate of say 8 (percent) would equal nine years of time to double your money. With our current economy if you gained an interest rate of 1 percent it would then stand to reason it would take 72 years to double your investment.
These days it seems while earning 1 percent is awfully boring it is preferable to losing the value of your money in a more risky investment. That introduces a concept, which cannot be monetized, called the intrinsic value of a thing, such as sleeping well at night with the knowledge that Wall Street is not concocting another set of derivatives to extract one thousandth of a point return for some hedge fund which may render something you own less valuable.
Who can quantify the intrinsic value of sleeping well? Rip Van Winkle comes to mind as the appropriate person to compare a long period of sleep versus waiting 72 years for your original principal to double.
Too bad we can't figure out how to sell a good night's sleep. We couldn't man the phone banks with enough operators to keep up with demand.
Several recent events have highlighted local organizations making a difference in our community. Two I attended were particularly meaningful. The first was the inaugural luncheon of the Samaritan Counseling Center. The center is helping people who need a little extra help to speak to someone about their problems. Think of them as a Bethesda Clinic for people in need of counseling. It may be the most important and significant new charity to have hit the scene this year.
Then on Thursday, Hospice of East Texas celebrated its 30th anniversary. If you have never experienced what Hospice can do for a dying loved one, you are missing out on one of the most compassionate and loving ministries in this community.
The idea for Hospice came from one woman, Evelyn Lake who had learned of the concept through a friend's experience in Arizona. Mrs. Lake then turned to the Junior League of Tyler to work through the details and get the ball rolling.
My friend Fritter McNally reminded the crowd that, while some stereotypes exist of “Junior Leaguers” being genteel women of society who wear white gloves and attend “Teas,” the group of women in Tyler, in 1982, did some ground-breaking work to impact the community by forming the organization we now call Hospice of East Texas.
So, the next time you laugh at a joke about a “Junior Leaguer” don't forget about all the good that has been done in the interest of making this community better by caring women across this community.
In fact, perhaps one of the most shining examples of “compound interest” in our community is the long-term focus of the women of the Junior League on enriching the lives of those who do the living and the dying around here. And once their work is done perhaps we should give them a break and let them have their tea, and some cake if that's what they need.
Well done ladies.
Then on Thursday, Hospice of East Texas celebrated its 30th anniversary. If you have never experienced what Hospice can do for a dying loved one, you are missing out on one of the most compassionate and loving ministries in this community.
The idea for Hospice came from one woman, Evelyn Lake who had learned of the concept through a friend's experience in Arizona. Mrs. Lake then turned to the Junior League of Tyler to work through the details and get the ball rolling.
My friend Fritter McNally reminded the crowd that, while some stereotypes exist of “Junior Leaguers” being genteel women of society who wear white gloves and attend “Teas,” the group of women in Tyler, in 1982, did some ground-breaking work to impact the community by forming the organization we now call Hospice of East Texas.
So, the next time you laugh at a joke about a “Junior Leaguer” don't forget about all the good that has been done in the interest of making this community better by caring women across this community.
In fact, perhaps one of the most shining examples of “compound interest” in our community is the long-term focus of the women of the Junior League on enriching the lives of those who do the living and the dying around here. And once their work is done perhaps we should give them a break and let them have their tea, and some cake if that's what they need.
Well done ladies.
