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Live: The Great Wealth Transfer
The Baby Boomers are clocking out. Not just for lunch—forever (they’re not dying, they’re just retiring).
Over the next 20 years, an estimated $84 trillion in assets will be passed down to younger generations. Now that’s a lot of Cane’s hot and fresh chicken. It’s being called “The Great Wealth Transfer.”
So What?
This shift will reshape jobs, investments, and opportunities. More inheritances, more businesses changing hands, and more demand for services that cater to retirees.
There are ways you can take advantage (e.g. buying a business or moving into industries that will benefit from this transfer, etc.). I’m happy to talk more about this if you reply to my email.
Also, while Boomers had a lot of opportunities on their side, part of what contributed to their wealth was simple compounding investing.
Let me show you what I mean.
Learn: Compound Interest
You know how annoying people say something like “make your money work for you.”
Don’t agree with that. I say that all the time and there’s no way I’m annoying.
What they are often referring to is that it should grow without you doing anything. And this is where compound interest comes in.
Compound interest is when your money earns money… and then that money earns money… and then that money earns money… and then you get the idea now.
And this is the engine that revs your investments like a Maserati (figuratively). Because your money doesn’t grow at a steady rate. It grows faster and faster.
I like to use two examples to describe this.
1.) Don’t Be a Linear Loser
Below are two charts. One is linear. One is exponential (or what your money does when it compounds).
Linear was so 8th grade.
Notice how one of these charts looks way cooler than the other. So don’t be a linear loser, hop on the compounding cruise.
2.) Give Me Numbers Baby
So what does compounding interest look like numerically?
Let’s say you invest $1000 dollars. And let’s say that it grows at 10% (roughly the historical average return of the stock market for the last 50 years).
After one year you’ll have $1,100. Your money has grown by a hundred bucks! Not bad.
But after year two, you’ll have $1,210. Your money has grown by $110, not just $100, because 10% of $1,100 is $110!
And this increasing growth proceeds. The next year you’ll make $121. After that $133.10.
What $1000 invested at 10% interest over the above years adds up to.
And this is part of the reason the Boomers have so many trillions to pass on. Because they’ve had money invested since dinosaurs roamed and electricity had just been discovered and it has compounded that whole time!
TLDR:
The longer your money is invested, the longer it has to grow. And grow it will.
Leverage: Compound Interest Calculators
Now I can hear your heart beating fast. Your blood pressure increasing. Calm down.
You don’t actually need to do any math. You can use an investment calculator!
I use this one, but you can use whichever one speaks to you.
Just play with the numbers to see how your money can grow over time. Pay special attention to how much of your final total comes from interest versus your contributions. It will blow your mind.
Here’s a TikTok that can help illustrate the point.
Pros:
See exactly how much small contributions grow.
Compare starting now vs. later (hint: later loses).
You can play around with numbers, how much you need to contribute, time period, etc.
Cons:
Reality check can be depressing sometimes.
Assumes consistent returns (the real world has ups and downs).
Can tempt you to overestimate growth and under-save.
Also note that some compound interest calculators can help you figure out how credit card debt can compound against you! Worth checking out if you need more motivation to avoid credit card debt.
Quick reminder that I am not sponsored by any of the tools I note here. I wish I was! These are just the tools I use.
Launch!
Start investing now. This is the whole point of this newsletter.
Because if we look back at that compound interest chart we saw in the learn section, you’re probably at the part circled in red here:
Lil ways to go still. You got it though. Baby steps.
So let’s get that compounding gain train going.
Today you can:
Open a Roth IRA or brokerage account.
Put something in it—even $20.
If you’re bold: set up auto-contributions so you can start building that boomer lifestyle now.
Your future self will thank you… and might even buy you a boat. Or maybe one of those cute kitty pools. We all have dreams.
Success is yours if you seize it now. ;)
Hey!
Thank you so much for being a part of this newsletter. I am grateful to write to you weekly and I hope this helps you feel more confident with your finances.
If you found this newsletter helpful, please share it with a friend and invite them to subscribe.
I have a goal of helping people learn personal finance. It works better when more people get my emails.
Thank you for helping me (and your friend) out!
—Ben Brosnahan
