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This is what's so surprisingly scary about time value of money to me. Many "spectacular" investments that double or triple money over a decade or 2 are simply n
by cvrjk 5y ago
This is what's so surprisingly scary about time value of money to me. Many "spectacular" investments that double or triple money over a decade or 2 are simply not all that great if you just calculate the annualized return and factor in the inflation.
Back home, I've had so many agents try to sell me inferior insurance and investment opportunities dressed up as insane deals hoping I wouldn't look too much into the details. I was really lucky to come across the folks at /r/indiainvestments who frequently warn about this. But I am sure there are many others who are not aware of these things and fall for them.
- sn41 5y agoI suppose you have heard about the rule of 72 - it's quite useful for roughly figuring out doubling rate from compound interests, and vice versa: https://en.wikipedia.org/wiki/Rule_of_72 https://en.wikipedia.org/wiki/Rule_of_72 I guess doubling in 10 years corresponds to annual percentage of 7.2 percent, and 20 years, 3.6 percent. Adjusting for inflation, the rate will be lower. BTW, you may be referring to Unit-linked insurance schemes. They are neither good as insurance, nor good as investments.
- TedDoesntTalk 5y agoInsurance companies should not be used to invest your money. They are insurance companies. Much better choices exist for investment managers.
- thehappypm 5y agoYou may be right about “should” but the insurance industry is basically an investment industry financed by premiums and always has been.
- TearsInTheRain 5y agoIt is common practice for PE firms to buy insurance companies in order to better manage the investment side of the business.