These numbers are so extreme they look absurd, but they’re accurate! If you had a dollar bill in 1913 and held it until today, it would still be $1, but after adjusting for inflation it would buy about 97% less stuff. If instead you invested that $1 in the stock market in 1913 and held it until today (including re-investing dividends) you would have $52,160. That’s over a 5 million percent increase. But when you then adjust that growth for inflation you get back to the pedestrian 163,016%.

Of course no one is going to actually get all 163,016% because no one is going to live to be the required 112 years old. But for the 40-50 years of your life you ARE investing, which train do you want to be on? The cash train that loses value to inflation every year? Or the investing train that has averaged about 7% growth AFTER accounting for the negative impact of inflation.

When discussing investing I often hear new investors worried about risk. “I don’t want to risk losing my money”. I’ve got bad news for you. You ALREADY ARE LOSING YOUR MONEY. Which side of this infographic looks riskier? The slow exponential decay of cash to inflation is non-stop. But investing has volatility. We’re seeing that in the market right now. The S&P 500 is down about 10% year to date. But over the last 5 years it’s up over 108%. And over 20 years it’s +570%. And over 113 years… well you know.

The point is while investing involves SHORT TERM volatility, it ensures long term growth. Cash offers no short term volatility, but long term decay. Both are tools in your financial arsenal (short term expenses = cash, long term growth = investing). Just make sure not to miss out on the growth!

Shout out to @theworstadvicepodcast. I was just recording an episode with them when we stumbled on this stat together and had to double check it because it was so wild.

As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.

-Jeremy