David Chilton “Compound Interest is Neat Stuff.”

Anybody have a time machine?



Preferably a DeLorean with ample plutonium and a reliable flux capacitor. 


I need to go back in time for a sec.

Destination: November 1, 1995.

My 18th birthday.



Not only was this a milestone birthday, but it was also the day when I got my mitts on a small car accident settlement.

Yeah, it was only around $1,500 … but it felt like a fortune to a college freshman.



What did I do with the money?



Duh. I did what most college freshmen do with their money. I smoked it up. Literally.

That’s why I need a DeLorean. So I can go back to 1995, slap the bong out of my hand, and have a talk with my younger self about this thing called compound interest.



It would go something like this…

Hey, Stoner. Happy Birthday. It’s me. I’m you in 27 years. Damn right, I (you) still look good. The black don’t crack. But hey, I can’t stay long. I just wanted to interrupt this celebratory smoke session so I can teach you something about that money you’re about to burn up.



Ever heard of compound interest? Right, most kids your age haven’t. They don’t teach you this stuff in school. Weird, I know. Here’s how it works…



If you take that $1,500 you’ve got and invest it in the market, then commit yourself to putting just $100 into the account every month, guess how much money you’ll have, with an average 10.7% annual rate of return, when you’re my age?

Young Sean struggles to come up with an answer.



You’d have $194,479.



Young Sean is mid-bong hit when he hears this. He coughs. And coughs. And coughs. It feels like he’ll never stop coughing.

Crazy, huh? Compound interest is nuts.



And that’s not all. If you stick with it and keep up your $100 per month deposit, by the time you’re 65 years old, you’ll have $1,563,364.


Seriously, dude. The best thing you have going for you right now is TIME. If you start taking advantage of compound interest today, you won’t have the financial woes and insecurities that most people go through. But if you wait and get into the game late — like most people do — it can be hard to catch up.

Time flies. Before you know it, you’re gonna be dyeing your beard and going to bed at 9:30pm. You can take that money you have and smoke out all your friends. Or you can be building a solid stack of cash for the future you. What’s it gonna be?


Young Sean appears intrigued. So I pull out my calculator and we start playing around with the numbers. If he contributes $200 a month, he’ll have almost $3 million at age 65. Two hundred fifty a month, $3.6 million.

“Great Scott!” he says.

My work is done.



Hey dude, I gotta fly up out of here. No need to decide right now. I’ll know when I get back to 2023. Keep reading those books. You’re gonna help a lot of people.


Imagine what the world would be like if more adults had this conversation with young people.



Would we have less families living check to check? Less 35-year-olds living with their parents? Less elderly parents feeling like burdens to their children? Less couples fighting over money? More financially stable humans generously contributing to causes they care about?



All it takes is some basic financial education, a conversation or two about compound interest, a little mentorship and guidance.

And TIME.

Because no one has a time machine.

 The best time to have that conversation is now.

On today’s episode of the podcast, David Chilton shares a much-needed primer on the incredible power of compound interest. It’s a must-listen!

Source: The Wealthy Barber (1992 Financial VHS)