Why Invest Forever? (Part 6)

Key Points

  • Assuming a 7.2% annualized real return (including reinvested dividends), an investment will double in value about every 10 years following the rule of 72.
  • Given this rate of return, $1 can grow to $1000 after 100 years and $1 million after 200 years.
  • After enough gains in capital, incremental income can be consumed on a go-forward basis (practically indefinitely), without eroding the capital base (note: restrictions apply).

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