With government finances continuing to decline and our federal treasurer suggesting working Australians should forget about relying on the aged pension we thought the following riddle might make for good conversation with the up and coming generation in your family.
If a lily pond doubled in size every day and it took 10 days to go from a tiny speck to filling up the entire pond, how long would it take from occupying one quarter of the point to filling it up?
The answer is two days. If it doubled every day it would take one day to go from a quarter to a half and one more day to go from half to full. Notice how the rate at which it grows get faster and faster as time goes by – it’s called the miracle of compounding.
The moral of the story is TIME. We often hear clients comment if they could wind the clock back they wish they would have started investing sooner than they did. As we say often a successful investment experience does not require special knowledge of picking the right time or the right investment but rather having a well thought out strategy based on key fundamentals and then taking action and staying disciplined to the process. Too often our logical mind and a busy life gets in the way of taking the regular and small steps which are required to plant the seeds to grow a full lily pond.