With Group 3, Wilma does everything she did with Groups 1 and 2, but adds even more special treatment to see how the “Big O’s” will respond. She starts classes on ballet dancing, truck driving, and hockey playing. The orangutans in Group 3 become even more fit and even more attractive to each other. She plays romantic music on loudspeakers at night and puts ‘57 Chevy’s throughout Group 3’s enclosure so that couples (properly married, of course) can make out in the back seat. The growth rate increases by another 1 %. The rate of growth for Group 3 throughout the years is 11 1/3 %. She puts in the money each year to add one orangutan to this group also.
Wilma and Willy’s Orangutan Group 3 Starting with 12 Animals when Wilma is 20
(Growth Rate of 11 1/3 % with 1 Orangutan Added at Beginning of Each Year)
Wilma’s Age: 20 Number of Orangutans: 12
Wilma’s Age: 21 Number of Orangutans: 14
Wilma’s Age: 22 Number of Orangutans: 17
Wilma’s Age: 23 Number of Orangutans: 20
Wilma’s Age: 24 Number of Orangutans: 24
Wilma’s Age: 25 Number of Orangutans: 28
Wilma’s Age: 26 Number of Orangutans: 32
Wilma’s Age: 27 Number of Orangutans: 36
Wilma’s Age: 28 Number of Orangutans: 42
Wilma’s Age: 29 Number of Orangutans: 48
Wilma’s Age: 30 Number of Orangutans: 54
Wilma’s Age: 31 Number of Orangutans: 61
Wilma’s Age: 32 Number of Orangutans: 69
Wilma’s Age: 33 Number of Orangutans: 78
Wilma’s Age: 34 Number of Orangutans: 88
Wilma’s Age: 35 Number of Orangutans: 99
Wilma’s Age: 36 Number of Orangutans: 112
Wilma’s Age: 37 Number of Orangutans: 126
Wilma’s Age: 38 Number of Orangutans: 141
Wilma’s Age: 39 Number of Orangutans: 158
Wilma’s Age: 40 Number of Orangutans: 177
Wilma’s Age: 41 Number of Orangutans: 198
Wilma’s Age: 43 Number of Orangutans: 248
Wilma’s Age: 45 Number of Orangutans: 310
Wilma’s Age: 50 Number of Orangutans: 537
Wilma’s Age: 55 Number of Orangutans: 925
Wilma’s Age: 56 Number of Orangutans: 1031
Wilma’s Age: 57 Number of Orangutans: 1149
Wilma’s Age: 58 Number of Orangutans: 1280
Wilma’s Age: 59 Number of Orangutans: 1427
Wilma’s Age: 60 Number of Orangutans: 1589
Wilma’s Age: 61 Number of Orangutans: 1770
Wilma’s Age: 62 Number of Orangutans: 1927
Wilma’s Age: 63 Number of Orangutans: 2197
Wilma’s Age: 64 Number of Orangutans: 2447
Wilma’s Age: 65 Number of Orangutans: 2725
Wilma’s Age: 66 Number of Orangutans: 3035
Wilma’s Age: 67 Number of Orangutans: 3380
Wilma’s Age: 68 Number of Orangutans: 3764
Wilma’s Age: 69 Number of Orangutans: 4192
Wilma’s Age: 70 Number of Orangutans: 4668
For Wilma’s parents, the total for a growth rate of 8 1/3 % with the addition of 1 orangutan each year was 1353 at age 70.
For Wilma and Willy with a growth rate of 11 1/3 % and with adding 1 orangutan each year, the total number of orangutans is 4668.
There are 3315 more orangutans at the end at 11 1/3 % growth than there was at 8 1/3 % growth.
An increase of 3 % in the rate of return has caused an increase of 245 % in the number of orangutans at the end. This illustrates how much impact a large increase in the rate of return can have over the long run.
Behold the Power of Higher Returns
An increase of just 1 % in the rate of return has caused an increase of 50 % in the number of orangutans at the end.
An increase of 2 % in the rate of return has caused an increase of 128 % in the number of orangutans at the end.
An increase of 3 % in the rate of return has caused an increase of 245 % in the number of orangutans at the end.
The important point here is that even just a small amount of increase in the rate of return over the long run yields surprisingly large results. So, how do you go after the higher returns, especially if this is all new and foreign to you? Part of the answer is in diversification, which is discussed in another article. There are a multitude of investment strategies banging around in the universe and mastering all of these is impossible even if we could all agree on the ones that work the best. We, of course, do not all agree on the ones that work the best. There are as many opinions as there are people forming those opinions. So, what do you do to get the higher returns?
If you are a newbie at this, to keep things simple, I recommend “24 Essential Lessons for Investment Success” by William J. O’Neil, the founder of “Investor’s Business Daily”. His paper contains market data on virtually every stock in tables, charts, and graphs that can help you make your investment decisions. After reading his book, you will understand how to use the information in his paper. There are also Investor’s Business Daily Meetup Groups in major cities in the U.S. and in many smaller cities. O’Neil has his critics. Anyone and everyone who tries to do anything always does, but this is as good a place to start as any.
Later, you may develop into such an investment pro that you develop an approach that works even better than the O’Neil strategies. Until that day arrives, you can go to one of these “IBD” Meetup Groups, develop relationships, and ask the “IBD” veterans there to mentor you as you learn how to make your investment choices. This will help you start thinking about investing and develop a sense of confidence. Then, you can continue to read, do research on the internet, and learn other investment approaches that work for you.
Tags: Debt Destruction, Financial Planning, Humor, Wealth Building
