Mystery of Compound interest: u will pay it, if u don't know it

[Naanto Mushi]

I did account and finance at University back then few years ago. Apart from living normal life kama ku socializing sana, flirting girls kwa sana nimekuwa every time na fantasize kuhusu maisha ya baadae nikifika kwenye uzee kama Mungu akinibariki. So katika ku fantasize uzee wangu nimekuwa nikijiuliza sana ni kitu gani hasa kinawatokea wazee ages from 60's na kuendelea maana everytime napokutana na mzee yoyote chances are, most of them are poor.

Haijalishi zamani alikuwa nani, unakuta hata wale ambao walisomaga na kuajiriwa kwenye mashirika makubwa ya serikalini na zamani waliishi maisha mazuri bado most of them wakifika kwenye uzee wanakuwa masikini. Hata kama sio masikini lakini maisha ambayo wanaishi hayana quality ile ambayo mtu unaweza kusema ni good life.

Nlikuwa najiuliza for so long ila i came to a conclusion juzi uski kwamba "they have paid the cost of compound interest" wazee wengi ambao now wana age 60's including my father kwa kipindi cha miaka 30 iliyopita hawakuwa na solid understanding ya hii kitu inaitwa "compound interest" ambayo kwa upande mwingine mimi huwa naiita forecasting the future.

Baada ya kupata hiyo conclusion na kujua the reason behind. Mimi mwenyewe nimedhamiria kabisa kwa dhati kwamba siwezi kuwa failure kama wazee wangu though bado mi ni kijana na bado actually nipo kwenye hustle ya kutoka kimaisha lakini from this day nimeazimia kitu kimoja na kama kuna kijana yoyote atajiskia ku follow this principle nataka kuanza leo a follow while the night is still young.

Ni hivi, from compound interest point of view ambayo nilipata formula juzi usiku na niliielewa sana tu. Nimeweka commitment kwamba kila mwaka nitakuwa naangalia investment yoyote ambayo nataka inipe return ya atleast 10% ya mtaji wangu. Yaani mfano kama nna 2,000,000 kwenye mwaka huu then nikawekeza kwenye kilimo ina maana natakiwa niwe by mwisho wa mwaka nna 2,200,000.

Sasa strategy yangu ipo hivi Kila mwaka ntakuwa na add kwenye portfolio yangu new 2,000,000 na kwa sababu ntakuwa tayari nna strategy ya wapi pa ku invest hiyo hela na kupata return ya above 10% iwe kwenye kilimo, real estate, uvuvi hata huko kwenye mabenki nasikia unaweza pata mpaka riba ya 10%. So ntakuwa nafanya hivo from sasa hivi nna kama around 24 hivi kwa hiyo ntahesabu mpaka 60 years hapo kuna gap kama ya 35 years.

Sasa kwa mahesabu niliyopiga mpaka nakuja kufikisha hiyo age 60 ntakuwa na portfolio kama ya shingi 580,000,000 and by that nafikiri young people will respect me na watakuja kuniomba ushauri pindi ntapoandika kitabu cha mafanikio yangu. Na ntawajibu nini? Ntawaambia kids relax, i just pull 2,000,000 every year to invest and get a return of 10% plus kuwa na discpline.

Sababu wote sio wana mahesabu hapa ntaweka jedwali hilo na nataka uangalie kwa makini ni jinsi gani kila mwaka niliongeza just 2,000,000 kwenye portfolio yangu ya kufikirika.

Years PV Interest 10% FV
1 2,000,000.00 1.1 2,200,000.00
2 4,200,000.00 1.1 4,620,000.00
3 6,620,000.00 1.1 7,282,000.00
4 9,282,000.00 1.1 10,210,200.00
5 12,210,200.00 1.1 13,431,220.00
6 15,431,220.00 1.1 16,974,342.00
7 18,974,342.00 1.1 20,871,776.20
8 22,871,776.20 1.1 25,158,953.82
9 27,158,953.82 1.1 29,874,849.20
10 31,874,849.20 1.1 35,062,334.12
11 37,062,334.12 1.1 40,768,567.53
12 42,768,567.53 1.1 47,045,424.28
13 49,045,424.28 1.1 53,949,966.71
14 55,949,966.71 1.1 61,544,963.38
15 61,544,963.38 1.1 67,699,459.72
16 69,699,459.72 1.1 76,669,405.69
17 78,669,405.69 1.1 86,536,346.26
18 88,536,346.26 1.1 97,389,980.89
19 99,389,980.89 1.1 109,328,978.98
20 111,328,979.00 1.1 122,461,876.90
21 124,461,876.90 1.1 136,908,064.59
22 138,908,064.60 1.1 152,798,871.06
23 154,798,871.10 1.1 170,278,758.21
24 172,278,758.20 1.1 189,506,634.02
25 191,506,634.00 1.1 210,657,297.40
26 212,657,297.40 1.1 233,923,027.14
27 235,923,027.10 1.1 259,515,329.81
28 261,515,329.80 1.1 287,666,862.78
29 289,666,862.80 1.1 318,633,549.08
30 320,633,549.10 1.1 352,696,904.01
31 354,696,904.01 1.1 390,166,594.41
32 392,166,594.41 1.1 431,383,253.85
33 433,383,253.85 1.1 476,721,579.24
34 478,721,579.24 1.1 526,593,737.16
35 528,593,737.16 1.1 581,453,110.88

Tuliza kichwa na usome kwa makini. Strategy above ni ku sacrifice 2,000,000 every year lakini hiyo ni mfano tu kuna hata waajiriwa wana uwezo wa ku pull 5,000,000 per year na you can imagine at the end of year 35 atakuwa na portfolio kubwa kiasi gani chini ya assumption yetu?

Suala ni kwamba haiwezi kuwa exactly baada ya year 35 utakuwa na portfolio yenye networth kiasi hicho ila pia am sure hautakuwa the same na wazee ambao nakutana nao almost kila siku age 60's na ni masikini wa kutupa.

Amua leo kijana mwenzangu, tuanze pamoja leo leo, think about 35 years to come, understand mystery of compound interest while u still young coz if u don't, u will pay heavy price for it.

 

[moto ya mbongo]

Imekaa vizuri kama utastick na plan yako. Uncertaintities occur so jipange mkuu

 

[Chivundu]

"Ceteris peribus" . Kijana unaleta theories za chuo kwenye real life!.
Haya kila la kheri.

 

[Senior Boss]

Kuna vitu kama inflation, financial risks i.e. interest rate risk, taxes etc.

Cash is trash...instead focus on fixed appreciating assets i.e. Real Estate and maintaining a positive cash flow i.e. passive income sources.

Ni ushauri mzuri though.

 

[Naanto Mushi]

"Ceteris peribus" . Kijana unaleta theories za chuo kwenye real life!.
Haya kila la kheri.

Hahahah sawa mkuu... ina maana lakini hujaona hata uhalisia japo kidogo?

Umeajiriwa?

 

[Naanto Mushi]

Kuna vitu kama inflation, financial risks i.e. interest rate risk, taxes etc.

Cash is trash...instead focus on fixed appreciating assets i.e. Real Estate and maintaining a positive cash flow i.e. passive income sources.

Ni ushauri mzuri though.

Yaah ni kweli inflation, taxes na risk nyingine zinaweza ku interfere kwenye hiyo investment. But mimi huwa sielewagi kwanini ukitazama future lazima watu waongelee issue ya inflation na uncertainties. Ina maana kwamba watu ambao wameajiriwa now na wana contribute kwenye pension funds almost average ya 150,000 per month ambayo ni sawa tu na hiyo 2,000,000 per year kwamba in 35 years to come wanaweza kupata lumpsum cash ya above 580,000,000 kama huo mfano wangu hapo juu?

Umeajiriwa?

 

[Yaleyale]

Hongera mkuu. Mimi ni mwajiriwa na kiukweli umeongeza mawazo fulani kwenye akili yangu. Waliofanikiwa wote walijaribu, so hata ikitokea haujatimiza malengo 100%, definitely you will be somewhere. Hutakuwa Sawa na yule ambaye hakujaribu kabisa.

 

[nra2303]

Wazo zuri sana,kuna kitu nimejifunza kwy uzi na kujifunza ndio mwanzo wa maarifa na kukifanyia kazi.Asante

 

[simplemind]

Haya poa, moto unaelekea kwenye kichaka.

 

[Senior Boss]

Yaah ni kweli inflation, taxes na risk nyingine zinaweza ku interfere kwenye hiyo investment. But mimi huwa sielewagi kwanini ukitazama future lazima watu waongelee issue ya inflation na uncertainties. Ina maana kwamba watu ambao wameajiriwa now na wana contribute kwenye pension funds almost average ya 150,000 per month ambayo ni sawa tu na hiyo 2,000,000 per year kwamba in 35 years to come wanaweza kupata lumpsum cash ya above 580,000,000 kama huo mfano wangu hapo juu?

Umeajiriwa?

Niliacha kuajiriwa muda kidogo, ok kwa ufupi the gov't often prints money and injects it in the system at some point currency yetu hu depreciate against the USD or GBP while u salary remains fixed....that shud tell u something.

Marekani na UK inflation ni 0% (in most cases).....so unaweza ukadhani utafaidika na hyo pension yako baadae million kadhaa huko mbele kumbe at that particular time ur currency has depreciated big tym yet watu hushangaa mtu kafanya kazi miaka 35 then kiunua mgongo kinakuja kua like 40 million Tsh ambazo kwa muda huo ni almost worthless.

Thats insane. Kuna facts nyingi na kwa kina zaidi ndio maana nimekuambia straight focus on fixed appreciating assets...ntaongezea nikipata muda...im tired of writing.

Na inflation rate na financial risks ni vitu muhimu in finance cz there many factors contributing to that i.e. systemic risk & unsystematic risk....Bro its a long lesson...somaga na google kidogo.

 

[PACHOTO]

The high the risk the high the returns

 

[Chivundu]

Hahahah sawa mkuu... ina maana lakini hujaona hata uhalisia japo kidogo?

Umeajiriwa?

Nina biashara zangu mzee. Uhalisia upo lakini haitekelezekii mzee. Uncertainities ni nyingi yaani infinite. Karibu katika ulimwengu wa biashara.

 

[Naanto Mushi]

Nina biashara zangu mzee. Uhalisia upo lakini haitekelezekii mzee. Uncertainities ni nyingi yaani infinite. Karibu katika ulimwengu wa biashara.

Okay.. ila mimi nimetolea mfano 2,000,000 ya ku sacrifice every year ila kama bado unasema uncertainties ni nyingi na wewe ni mfanya biashara mpaka hizo uncertainties zizuie mtu ku save 2M per year i doubt hiyo ni subsistence business..

 

[Naanto Mushi]

Niliacha kuajiriwa muda kidogo, ok kwa ufupi the gov't often prints money and injects it in the system at some point currency yetu hu depreciate against the USD or GBP while u salary remains fixed....that shud tell u something.

Marekani na UK inflation ni 0% (in most cases).....so unaweza ukadhani utafaidika na hyo pension yako baadae million kadhaa huko mbele kumbe at that particular time ur currency has depreciated big tym yet watu hushangaa mtu kafanya kazi miaka 35 then kiunua mgongo kinakuja kua like 40 million Tsh ambazo kwa muda huo ni almost worthless.

Thats insane. Kuna facts nyingi na kwa kina zaidi ndio maana nimekuambia straight focus on fixed appreciating assets...ntaongezea nikipata muda...im tired of writing.

Na inflation rate na financial risks ni vitu muhimu in finance cz there many factors contributing to that i.e. systemic risk & unsystematic risk....Bro its a long lesson...somaga na google kidogo.

Nimekuelewa sana mkuu.. but that is too much extreme. Kumbuka hata sisi tuna central bank yetu ambayo ina oversee vitu kama inflation kila mwaka isivuke kiwango fulani ili kulinda thamani ya pesa kwa kipindi kijacho.

Ila kwenye upande pia wa hizi pension za kibongo bongo mtu baada ya miaka 35 ya kulitumikia taifa anakuja kupewa kiinua mgongo milioni 100 huu kweli ni wizi. Na ndo mana mimi nataka ku create my own pension ambayo baada ya hiyo miaka 35 sidhani kama milioni 580,000,000 itakuwa ni kidogo hata ukijumlisha na inflation. NB ndo mana pia nikasema hiyo itakuwa ni portfolio ya assets mchanganyiko kuanzia kwenye kilimo, real estate, business na kwenye fixed deposits za mabenki kwa hiyo am sure depreciation yoyote itayotokea haitakuwa na effect yoyote kubwa kwenye portfolio yangu.

 

[Senior Boss]

Nimekuelewa sana mkuu.. but that is too much extreme. Kumbuka hata sisi tuna central bank yetu ambayo ina oversee vitu kama inflation kila mwaka isivuke kiwango fulani ili kulinda thamani ya pesa kwa kipindi kijacho.

Ila kwenye upande pia wa hizi pension za kibongo bongo mtu baada ya miaka 35 ya kulitumikia taifa anakuja kupewa kiinua mgongo milioni 100 huu kweli ni wizi. Na ndo mana mimi nataka ku create my own pension ambayo baada ya hiyo miaka 35 sidhani kama milioni 580,000,000 itakuwa ni kidogo hata ukijumlisha na inflation. NB ndo mana pia nikasema hiyo itakuwa ni portfolio ya assets mchanganyiko kuanzia kwenye kilimo, real estate, business na kwenye fixed deposits za mabenki kwa hiyo am sure depreciation yoyote itayotokea haitakuwa na effect yoyote kubwa kwenye portfolio yangu.

Hyo M 580 baada ya miaks 35 ni pesa kichaa....heb jiulize ukinunua ardhi au nyumba then uka make cashflows from it. Hyo ardhi itakua na thamani gan after 35 years heb fikiri ukisema uje uiuze after 35 years utapiga hela gan ??

Imagine ukiwa na maeneo mengi potential....juzi kuna mzee namjua hapa dar alinununua eneo la acre 5 miaka 15 iliyopita kwa million 30 kalifanyia business wee kaja kuliuza kwa nssf Billon 13 yeye akala Billion 10 net na alishapiga business sana pale. U get my point ??

Na pia huoni hzo cashflows generated from that asset hela yako itakua imesharudi na asset still unayo as an added advantage ?? Ndio maana awali nikakwambia Cash is Trash....benki kuu yako haiwez zuia inflation by any how wao hu adjust monetary policies tu.

Ndio maana wapigaji wote serikalini wakisha tuliza hela zetu either huwekeza in buildings au wanaenda nunua mijengo nnje huko dubai, States of America, Carribean etc. Cz assets hzo hzo zitawaletea foreign earnings (exchange rate profits etc) for a life time.

 

[newazz]

I did account and finance at University back then few years ago. Apart from living normal life kama ku socializing sana, flirting girls kwa sana nimekuwa every time na fantasize kuhusu maisha ya baadae nikifika kwenye uzee kama Mungu akinibariki. So katika ku fantasize uzee wangu nimekuwa nikijiuliza sana ni kitu gani hasa kinawatokea wazee ages from 60's na kuendelea maana everytime napokutana na mzee yoyote chances are, most of them are poor.

Haijalishi zamani alikuwa nani, unakuta hata wale ambao walisomaga na kuajiriwa kwenye mashirika makubwa ya serikalini na zamani waliishi maisha mazuri bado most of them wakifika kwenye uzee wanakuwa masikini. Hata kama sio masikini lakini maisha ambayo wanaishi hayana quality ile ambayo mtu unaweza kusema ni good life.

Nlikuwa najiuliza for so long ila i came to a conclusion juzi uski kwamba "they have paid the cost of compound interest" wazee wengi ambao now wana age 60's including my father kwa kipindi cha miaka 30 iliyopita hawakuwa na solid understanding ya hii kitu inaitwa "compound interest" ambayo kwa upande mwingine mimi huwa naiita forecasting the future.

Baada ya kupata hiyo conclusion na kujua the reason behind. Mimi mwenyewe nimedhamiria kabisa kwa dhati kwamba siwezi kuwa failure kama wazee wangu though bado mi ni kijana na bado actually nipo kwenye hustle ya kutoka kimaisha lakini from this day nimeazimia kitu kimoja na kama kuna kijana yoyote atajiskia ku follow this principle nataka kuanza leo a follow while the night is still young.

Ni hivi, from compound interest point of view ambayo nilipata formula juzi usiku na niliielewa sana tu. Nimeweka commitment kwamba kila mwaka nitakuwa naangalia investment yoyote ambayo nataka inipe return ya atleast 10% ya mtaji wangu. Yaani mfano kama nna 2,000,000 kwenye mwaka huu then nikawekeza kwenye kilimo ina maana natakiwa niwe by mwisho wa mwaka nna 2,200,000.

Sasa strategy yangu ipo hivi Kila mwaka ntakuwa na add kwenye portfolio yangu new 2,000,000 na kwa sababu ntakuwa tayari nna strategy ya wapi pa ku invest hiyo hela na kupata return ya above 10% iwe kwenye kilimo, real estate, uvuvi hata huko kwenye mabenki nasikia unaweza pata mpaka riba ya 10%. So ntakuwa nafanya hivo from sasa hivi nna kama around 24 hivi kwa hiyo ntahesabu mpaka 60 years hapo kuna gap kama ya 35 years.

Sasa kwa mahesabu niliyopiga mpaka nakuja kufikisha hiyo age 60 ntakuwa na portfolio kama ya shingi 580,000,000 and by that nafikiri young people will respect me na watakuja kuniomba ushauri pindi ntapoandika kitabu cha mafanikio yangu. Na ntawajibu nini? Ntawaambia kids relax, i just pull 2,000,000 every year to invest and get a return of 10% plus kuwa na discpline.

Sababu wote sio wana mahesabu hapa ntaweka jedwali hilo na nataka uangalie kwa makini ni jinsi gani kila mwaka niliongeza just 2,000,000 kwenye portfolio yangu ya kufikirika.

Years PV Interest 10% FV
1 2,000,000.00 1.1 2,200,000.00
2 4,200,000.00 1.1 4,620,000.00
3 6,620,000.00 1.1 7,282,000.00
4 9,282,000.00 1.1 10,210,200.00
5 12,210,200.00 1.1 13,431,220.00
6 15,431,220.00 1.1 16,974,342.00
7 18,974,342.00 1.1 20,871,776.20
8 22,871,776.20 1.1 25,158,953.82
9 27,158,953.82 1.1 29,874,849.20
10 31,874,849.20 1.1 35,062,334.12
11 37,062,334.12 1.1 40,768,567.53
12 42,768,567.53 1.1 47,045,424.28
13 49,045,424.28 1.1 53,949,966.71
14 55,949,966.71 1.1 61,544,963.38
15 61,544,963.38 1.1 67,699,459.72
16 69,699,459.72 1.1 76,669,405.69
17 78,669,405.69 1.1 86,536,346.26
18 88,536,346.26 1.1 97,389,980.89
19 99,389,980.89 1.1 109,328,978.98
20 111,328,979.00 1.1 122,461,876.90
21 124,461,876.90 1.1 136,908,064.59
22 138,908,064.60 1.1 152,798,871.06
23 154,798,871.10 1.1 170,278,758.21
24 172,278,758.20 1.1 189,506,634.02
25 191,506,634.00 1.1 210,657,297.40
26 212,657,297.40 1.1 233,923,027.14
27 235,923,027.10 1.1 259,515,329.81
28 261,515,329.80 1.1 287,666,862.78
29 289,666,862.80 1.1 318,633,549.08
30 320,633,549.10 1.1 352,696,904.01
31 354,696,904.01 1.1 390,166,594.41
32 392,166,594.41 1.1 431,383,253.85
33 433,383,253.85 1.1 476,721,579.24
34 478,721,579.24 1.1 526,593,737.16
35 528,593,737.16 1.1 581,453,110.88

Tuliza kichwa na usome kwa makini. Strategy above ni ku sacrifice 2,000,000 every year lakini hiyo ni mfano tu kuna hata waajiriwa wana uwezo wa ku pull 5,000,000 per year na you can imagine at the end of year 35 atakuwa na portfolio kubwa kiasi gani chini ya assumption yetu?

Suala ni kwamba haiwezi kuwa exactly baada ya year 35 utakuwa na portfolio yenye networth kiasi hicho ila pia am sure hautakuwa the same na wazee ambao nakutana nao almost kila siku age 60's na ni masikini wa kutupa.

Amua leo kijana mwenzangu, tuanze pamoja leo leo, think about 35 years to come, understand mystery of compound interest while u still young coz if u don't, u will pay heavy price for it.

View attachment 339352

Bandiko zuri.... safari yako ya uwekezaji? Nataka kujua kama kuna benki nzuri ambayo unaijua inatoa compound interest kwa muda wote hapa Tanzania?

 

[Beberu]

Nimekuelewa sana mkuu.. but that is too much extreme. Kumbuka hata sisi tuna central bank yetu ambayo ina oversee vitu kama inflation kila mwaka isivuke kiwango fulani ili kulinda thamani ya pesa kwa kipindi kijacho.

Ila kwenye upande pia wa hizi pension za kibongo bongo mtu baada ya miaka 35 ya kulitumikia taifa anakuja kupewa kiinua mgongo milioni 100 huu kweli ni wizi. Na ndo mana mimi nataka ku create my own pension ambayo baada ya hiyo miaka 35 sidhani kama milioni 580,000,000 itakuwa ni kidogo hata ukijumlisha na inflation. NB ndo mana pia nikasema hiyo itakuwa ni portfolio ya assets mchanganyiko kuanzia kwenye kilimo, real estate, business na kwenye fixed deposits za mabenki kwa hiyo am sure depreciation yoyote itayotokea haitakuwa na effect yoyote kubwa kwenye portfolio yangu.

Watu wanaponda ila kwa hii rate ya inflation ya 4-5 annual after 35 years 580M bado itakuwa ni pesa kubwa tu ambayo itakufanya uishi middle income lifestyle bila shida wala kuomba, uweze kujilipia bima za afya, uweze kuwa na vi tour japo viwili kwa mwaka na mzee mwenzako (kama yupo)

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