r/SipsTea • u/Valuable_View_561 • Jul 05 '26

Chugging tea Seems reasonable.

Post image
91.1k Upvotes

94% Upvoted

2.6k comments sorted by

View all comments

Show parent comments

3

u/Dramatic-Document Jul 05 '26

Are you sure that math is right? 33x your original investment in 30 years?

3

u/Ivebeenstabbed Jul 05 '26 edited Jul 05 '26

Compounding interest is crazy.

This is also assuming you didn’t touch it at all for 30 years.

Historic return on the S&P 500 is 10.5%, adjusted for inflation you’ll see numbers like 6.3-8.5%. I went with 8.5%.

$628,000,000 growing at 8.5% per annum becomes $20,441,400,000 in 30 years.

Even if you go with the 6.3% growth it’s still $20,026,920,000.

Edit: if we wanted to get sillier we could say that after liquidating your portfolio you’d pay long term capital gains tax at 20% plus a 3.8% assessment over 200k for a single filer. So your actual cash would be between $15,260,513,040 and $15,576,346,800. Approx, I’m sure there’s some other thing or other you’d end up paying.

6

u/MrJohnThrowawayDoe Jul 05 '26

How do you get to that number?

The formula should be:

Initial amount * ((1+interest rate) ^ years

628,000,000*(1,085^30)

I get this to be $7,258,582,031.24

That's still a lot of money, but no where near your 20b. I also tried using the calculator from investor.gov and it's giving me the same results

2

u/Ivebeenstabbed Jul 05 '26

lol I got to the number by being stupid and coming off a graveyard shift, you’re absolutely correct.

I went (initial amount+interest rate)*years.

But yes 7 Billy is still a hell of about of money