7.5% Doubles Every 9

A breakdown of how compound returns work over long time periods, specifically looking at wealth accumulation starting at age 30.

Core Compound Return Math (7.5% Annual Return)

• Money doubles approximately every 9 years
• Based on historical market returns over trailing 100 years
• Assumes same pattern continues for next 100 years

Example Growth Path Starting with $20M at Age 30

• Age 30: $20M (starting amount)
• Age 40: $40M (first double)
• Age 50: $80M (second double)
• Age 60: $160M (third double)
• Age 90: $1B (final amount)

Key Insights

• Getting wealthy at a young age is significant due to compounding time horizon
• Even losing half early on still leaves substantial wealth
  • Example: Can lose $10M of $20M and still have $10M base to compound
• People who can earn significant money young likely to continue earning
  • Natural ability to generate wealth provides additional safety net
• Question remains about future purchasing power
  • Unclear if $1B at age 90 will have same meaning as today

Important Factors

• Starting age is critical - determines compounding timeline
• Initial capital amount matters less than time horizon
• Historical returns not guaranteed to repeat
• Need to factor in inflation/purchasing power changes