"...but I digress"

I was talking to my youngest daughter today, she is 11 years old now. Often she will ask me about something, it could be anything, and the inevitable part of the question comes down to "why?". She never wants the superficial why but the real deep down reason why. All too often the real deep down reason is money whenever the question pertains to human interaction.

Today we were talking winning a million dollars and what would we do with it. There was an ad on the radio which brought the subject up. She chuckled after I gave my answer and she noted that it was the same answer the last time we talked about this.

I figured it was a good time to talk about the importance of a savings plan with a loose investment twist... seeing as we all of a sudden had a million to deal with.

I told her that if she could make a deal with herself that she will save $200 a month once she has started working, even if it is part time student jobs, that she will be better off in the long run and wouldn't ever really need a million dollar lottery win. If she misses a month because she really has to then track it and pay it back later but always, whenever possible, put that money aside first, before buying the extraneous stuff. We did some quick math to get an idea of how much we might have after a few years, fun discussion.

I am sure that I read about some that have done this, and were lucky enough to have been taught to do this early on. I told her that I wished someone had told me this when I was a kid. All I ever remember is the marketing for RRSPs through the bank that went on about saving for retirement... I did not put this in a retirement savings light as that is too far away for a kid to conceptualize.

I figure that if she really does this, when it comes time for some of these expenses she will have figured it out for herself that leaving it to grow is more important than spending it and that she will have taken it far beyond the initial kid savings plan when that time comes anyway.

This prompted me to do a quick calculation based on a $200 per month contribution with a variable rate of annual return. I figured that a 7% annual ROI with monthly compounding would be easy enough and started with that.

10 years after inception the balance is just over $35,000 with just under $11,000 being gains.

I played around with the numbers a bit and came up with the following results after 10 years:
(always the same contributions, $24,000 over the ten years)

10% Annual ROI : Balance = $41,510 : ROI = 71.53%
15% Annual ROI : Balance = $55,931 : ROI = 131%
20% Annual ROI : Balance = $76,672 : ROI = 216%
25% Annual ROI : Balance = $106,760 : ROI = 341%
30% Annual ROI : Balance = $150,736 : ROI = 523%
35% Annual ROI : Balance = $215.429 : ROI = 790%
40% Annual ROI : Balance = $311,135 : ROI = 1186%
45% Annual ROI : Balance = $453,399 : ROI = 1774%
50% Annual ROI : Balance = $665,735 : ROI = 2651%

The trick is consistent contributions and consistent gains, even if small.

Jeff.

"...but I digress"

I have always held to my tenet of writing this blog for me first as a method to journal some of my trading forays and to, perhaps, entertain a few who might be reading along. Nothing here is meant to be taken as advice on trading decisions even if I think they may be valid theories. I will do all the playing so I will be the one making or losing. I would still write it about the same if I had made it completely private.

I read other blogs and a number of newsletters and I am always surprised, or at least I used to be surprised, when a blog or newsletter would go commercial. Pushing advertising or affiliated sites, blogs or services with little more than a thin film of prose that may be interesting but mostly meaningless. I know that there is a desire to have an audience. While I would like to have lots of readers I also understand that I am not likely to go there as that would require me to refine my writing and start writing toward an external interest rather than for my personal desire.

Like everything in my trading I like to try out various things. I put an Adsense on my blog, I put a couple of Questrade ads in but that is about it. I think in the last year and a half my Adsense account is up to $15. Obviously I am not maximizing my potential as an online hack.

I suppose this is a little rantish, oh well.

There was one blog that I frequented for a while and I even found some decent information. I returned a few times over the last months and it has gone commercial. Affiliated links and little "reviewish" writeups along with a "premium lesson" link and a "subscription services" link. This means that the free blog is just a bunch of fluff with lots of hooks now.

I guess that I am disheartened after having tried out a number of paid services only to find a bunch of re-hashing of stuff that is available for anyone for free online or for a few bucks at the book store.

This is where the truth of "where's the money" shows through. Pumping services cannot help but take away from a genuine interest in trading and is reflected in the content of a commercial blog aimed more at making money than any real desire to enlighten or disseminate information.

I suppose if I streamlined my blog and gave some opinions on market direction and some tidbitty pieces of chart analysis I could pass it off as "premium" as well...right.

Off my soapbox for today.

Jeff.