After getting burned in tech stocks in 2000, I became an ultra-conservative investor. Gina and I have our savings in the very boring iShares Bond Index Fund, which plods along at a steady 5% return.

5% seemed really pathetic until I read this: if you invested a single penny at 5% back when Jesus was born, today you’d have a golden sphere a few hundred times the size of earth.

Sounds like an exaggeration, right? So this morning I tried it on my calculator. I typed 0.01 * 1.05, and I hit the equals sign 100 times. And then another 100, and another 100… watch this:

1 penny invested at 5% per annum

After 100 years….. $1.31
After 200 years….. $173
After 300 years….. $23,000
After 400 years….. $3 million
After 500 years….. $390 million
After 600 years….. $47 billion
After 700 years….. $6.2 trillion
After 800 years….. $811 trillion

You get the idea. Every hundred years, we’re adding roughly 2 zeros. So after 2000 years, your penny invested at 5% is worth around $100,000,000,000,000,000,000,000,000,000,000,000,000.

What do I learn from this?

1. 5% is an unbelievable return.
2. No family has ever had a reliable 5% return for any extended period of time
3. The current economic system is unsustainable. They say the stock market always returns 10% over the long haul? Baloney.