The Sheer Power Of Patience And Money

Rich people have money, but wealthy people have time. The power of time is how one creates real wealth. Wealthy people use their money to actually have more available time.

The main principle behind wealth is patience and money. 

Warren Buffet said it best when asked by fellow billionaire, Jeff Bezos, why everyone doesn’t adopt his simple investment strategy, he said, “ because no one wants to get rich slow.”

Warren Buffet’s net worth at age 36 was approximately 8 million dollars. Not a bad nest egg, however, that level of wealth is around Jimmy Buffett’s net worth. Eight million is not a reason why you know Warren Buffet’s name.

With time, by age 56, Warren Buffet’s net worth was estimated at 1.4 billion. And by age 66, his wealth had increased to 17 billion.

His wealth from age 90 has risen to approximately $93-100 billion dollars.

If one just started investing just $13 a day at the age of 23, assuming a return rate of 6%, they will become a millionaire by age of 67. If one started investing at age 35, one would need to save $30 a day for the same return by age 67. And if someone waited until the age of 45, it would take $63 per day to reach millionaire status by age 67.

The reason why time is so powerful is through compounding. Compound interest causes wealth to accumulate because one not only earns on money invested, but one also earns returns on those returns.

Compounding is patience in action.

If one invested, $1000 in AAPL stock (Apple) in 1980, that investment would be worth 1.4 million in 2023, forty or so years later. And that does not included dividend payments or splits of the stock. However, if one invested $10,000 at the stock offering of AAPL, that money would have increased to $14 million dollars.

That is the sheer kick-ass power of time.

And one would not have had to be clairvoyant to experience the power of time. If one invested $1000 in the S&P 500 in the year of 1980, that investment today would be worth approximately $100,000.

Time grants money so much power that the stock market has never lost money. With time as a partner, the stock market has never lost money! 

However, if you watched any financial shows, you’d be very hard pressed to find evidence showing the growth of the economy. The negative outweighs more than the positive and people watch shows for doom and gloom, not positive and upbeat. 

Within the world of setbacks, monetary losses become instantaneous and excellent television fodder. But, people heavily invested with the stock market would be remiss to not share that their wealth increased since the year of 2000. However, during times of upheaval and market losses, the same individuals would be calling their financial advisor.

Money, like everything else encounters setbacks, adversity, upheaval, and strife.

As Morgan Housel, author of the book, Psychology of Money wrote, “Progress happens too slowly to notice, but setbacks happen too quickly to ignore.”

To illustrate how the stock market has never lost money, one needs to examine the GDP.

The global gross domestic product (GDP) is a great indicator of a country’s economic health. In 2000, the global gross domestic product was approximately 33 trillion dollars. In the United States alone, circa 2000, the GDP was 10 trillion dollars.

To illustrate the power of  on wealth, by 2022, the global GDP had risen to 84 trillion dollars and the United States GDP was 21 trillion dollars.

That’s an increase of 51 trillion dollars globally and 11 trillion dollars within the United States GDP.

The S&P 500 follows the largest 500 companies in the United States. Similar to the GDP, it provides another indicator of an economy’s health. In the year 2000, the S&P 500 had an average closing price of $1427.22.

In the year 2022, the average closing price of the S&P index was $4425.88. That’s an average increase of the S&P 500 across just twenty-two years of almost $3000.

Which means…

[Tweet “If you can wait, then you can win.”]

If you can wait, then you can win.

Time possesses so much power that the inverse to patience and money is also true.  We must use the tools to maximize the power of time. If we did nothing with the $1000 in 1980 except put it under our mattress, then the buying power today of that same amount would be approximately $300!!!

Let’s face it, saving money and earning a 6% return is not sexy. A new car, I-phone, outfit, or shoes is sexy. Hosting the best boat party or wedding or birthday party is sexy.

We get more immediate satisfaction and joy out of out of spending than saving. We value the immediate over the future. And we want it, now. 

Patience and money

Dr. Rob Bell is a Sport Psychology Coach. DRB & associates coach executives and professional athletes. Some clients have included three different winners on the PGA Tour, Indy Eleven, University of Notre Dame, Marriott, and Walgreens.