Great site and topics. It's taken me a long, long, long time to realize the importance of the concept of compound interest. I know it's great fun to figure out what's next in the stock market. With all of the ups and downs I realized after 25 years of trading and thinking it was investing, I finally quit one day. Some weeks I had a profit of $30,000 in a month. The next month, I was down $40,000. I finally quit after rereading the book, "Your Money or Your Life" by Joel Dominguez and Vicki Robins (for the fourth time). I can't recommend it enough for RVers. Quite simply I was addicted to the market. Loved it, still do, but realize now it is all illusion.
The main concepts of the book are simple in relating work to life energy and hours left to live. Their recommended investment plan is to invest in something that can't lose money but promises an annual rate of return that beats inflation, and is guaranteed by the Federal Government. OK! What is it?
There is only one such investment vehicle...Treasury Bonds. In the year 2001, after losing most of our stock portfolio to the 2000 Tech Crash, we moved one half of our remaining funds to I-Bonds. At that time there was a 3% fixed return guaranteed for 30 years with an additional inflation factor added every six months. As a result we have averaged 5-6% annually for the past 12 years. By next year it will have doubled. Then, in another 12-13 years will double again. Fortunately, we have never needed to touch it as I choose to workamp whenever we could use some extra funds. I only wish I truly understood the power of compounding when I was in my 30s. I know many will shake their heads in reading this and say, "No way am I going to settle for 5% a year."
Yep. It's the old story of the turtle vs. the hare, all over again. In real life. In the end, we all die no matter the route, and a paragraph or two is left behind as our obituary.
I can't tell you how much this investment move has added to our peace of mind in our retirement years. I don't care what the stock market is doing, or the gold market, or politics. Although we have additional funds in a balanced Vanguard Fund, the I-Bonds are my favorite. Only wish we had doubled our purchase. At some point in life as we age, peace of mind outranks risk and possible gains. To be able to boondock in the desert in the winter, and a lake during the summer, look out at the grand vistas, and live off the grid, I smile at the outrageousness of it all. Now that's living! Finally, at age 75, I got it!
