The Price of Waiting
Three short lessons for the parent of a teenager with a first account: why growth over time is bigger than it looks, the rule of 72, and what a small yearly fee costs over thirty years. Every rate here is an assumption, not a promise.
For grown-ups, from what MarketQuest teaches children at Spark & Anvil.
Doubling slips
You'll need: Paper slips, a pen, and one calculator to share.
- Write growth rates on slips: 2%, 3%, 4%, 6%, 8%, 9% and 12%. Say out loud that each one is only an assumption.
- Draw a slip. Everyone guesses how many years it takes to double, then works out 72 ÷ the rate.
- Check on the calculator: start at 1 and multiply by 1.0 and the rate (1.06 for 6%) until it passes 2, counting the presses.
- Talk about which guesses were low, and why. Nobody wins; the slips go back in.
A little history, and what nobody knows
The rule of 72
The earliest known mention of the rule of 72 is in Luca Pacioli’s Summa de arithmetica of 1494, which states the rule without showing where it comes from.
Because Pacioli gives no derivation, how the rule was first found is not known.
Source: Rule of 72 (Wikipedia)
The same idea at every age
- Ages 3–5Save Up for It
- Ages 6–8Weeks to the Goal
- Ages 9–14Compound Growth and 1 more
- Ages 15–18Time Multiplies and 3 more
Your child will meet this idea again at every age. The tools and courses here are the part for you.