Item — HN Reader

> Yes. But you'll be earning relatively little when you're young so there won't be too many dollars left at the end of your fixed expenses to pull that trick with, besides, the interest rates are negative at the moment.

I don’t think you understand it. The intent is to invest that dollar into a basket of investments for 40 years. The stock market is up this past year, not negstive.

Sure Interest rates are negative but OP did not suggest sticking it in a bank. Besides, inflation eats at the value of a dollar.

1 comments

Yes, I totally understood it, but thank you for saying it again.

Compound interest does not apply to the stock market, it applies to savings.

The only way stocks can compound is if you re-invest dividends, and that's not 'interest'.

Inflation eats at the value of the dollar, but not at the value of real estate, so that's one way to make this all work for you: buy a house when you're young at the current low interest rates so that you have a chance to pay it off, and better make sure that you do this in a place that isn't subject to boom/bust cycles.