A Beginner’s System for Building Security in Small, Automatic Steps by Charles Wainer · a companion tool from the book
Chapter 8 · Companion tool
The Compounding Calculator
Time is the lever you control. Your runway, your monthly deposit, three illustrative balances. Change any number and the answer changes as you type. Illustration, not a promise.
The two pictures from Chapter 8
Figure 3. Maya started at 25 with $200 a month. Jake started at 45 with $500 a month. Same fund, same assumed rate. Maya’s line quietly pulls away and never comes back.Figure 4. The first four rows of Table 1 in picture form, at an assumed 8 percent a year. Each cluster is one monthly contribution level, each bar a time horizon. The bars do not grow in a straight line. They accelerate.
What closes your gap
Appendix A, Day 12, in three lines. Grow what you already have, take it off your enough number, then find the monthly deposit for what is left. All in today’s dollars, at 5 percent.
Historical broad-market United States averages have been roughly in this range over long periods; real returns vary year to year, sometimes substantially. Nothing here is a guarantee. The 5 percent figure is the answer in today’s dollars, the figure to hold against your enough number, as Table 2 in Chapter 8 does. The 7 and 8 percent figures are before inflation, so they look bigger than they will feel. Deposits are counted at the end of each month and compound monthly.
Keep the streak going
Finish the chapter in the book, then come back for the next tool. If something here did not land, bring it to Open Mic and I will walk through it live.
