The Motley Fool Discussion Boards
Retirement Discussions / Retired Fools
|Subject: Re: women & retirement planning||Date: 11/15/2000 8:05 AM|
|Author: rhecker||Number: 5585 of 19553|
I just wanted to clarify something you said:
If I do inherit, I think my two (single, childless) sisters and I will just keep our shares together and invest as a unit to take advantage of the compounding effect.
Keeping the money together or dividing it into thirds will not affect the benefits of compounding.
For example, say you and your two sisters inherit $150,000. Divide it into thirds and you each get $50,000. If each of you invested in the same index fund with the same starting and ending dates and that index fund earned 10% each year, then each of you would have about $130,000 in 10 years. If you invested the same $150,000 as a whole into the same index fund as the above example with the same starting and ending dates, the $150,000 would become $390,000, which you could then divide between the 3 of you to get $130,000 each. No difference.
|Copyright 1996-2015 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us|