Laurie Ingle because there are no flashing cars, watches or bobbies. Had I not discovered him in my early 20s, I would be broke like most of my friends, but here I am sitting on few hundred thousands on liquid investment. I don’t know if he makes any money from UA-cam but I can guarantee you people who heed his advise will make a lot.
Yes, earning a real rate of interest of 5% means 5% over and above inflation - let’s say for this example the nominal return was 8% and inflation was a constant 3% for the 20 yrs, this would achieve the real return of 5%. In other words, the £2,653 is in today’s prices. If we we’re told that we were earning a nominal (not adjusted for inflation) rate of 5% then you’re right, we wouldn’t know how good that is until we also know what the inflation rates will be. The point of using the real rate is that it strips out the devaluing effect of inflation and allows us to think about future pots of money in terms of what it could buy us at today’s prices (which is clearly more intuitive and user-friendly).
Tim's videos are truly excellent. Unsure why he's not getting more views tbh
I completely agree and wonder the same thing!
Laurie Ingle because there are no flashing cars, watches or bobbies. Had I not discovered him in my early 20s, I would be broke like most of my friends, but here I am sitting on few hundred thousands on liquid investment. I don’t know if he makes any money from UA-cam but I can guarantee you people who heed his advise will make a lot.
Brilliant channel, thanks heaps.
Is the buying power really x2.6 though? Given that 20 years of inflation will have brought that £2653 down...
Yes, earning a real rate of interest of 5% means 5% over and above inflation - let’s say for this example the nominal return was 8% and inflation was a constant 3% for the 20 yrs, this would achieve the real return of 5%. In other words, the £2,653 is in today’s prices. If we we’re told that we were earning a nominal (not adjusted for inflation) rate of 5% then you’re right, we wouldn’t know how good that is until we also know what the inflation rates will be. The point of using the real rate is that it strips out the devaluing effect of inflation and allows us to think about future pots of money in terms of what it could buy us at today’s prices (which is clearly more intuitive and user-friendly).
Thank you Sir
Thank you for this
Good basic tips for life.
For me the easy banking teacher,Thanks Sir