Joel Greenblatt on the Most Important Element of Compound Growth

Joel Greenblatt on the most important element of compound growth // In this video I share an illustrative example from Joel Greenblatt on a recent Masters in Business podcast episode, where he highlighted the HUGE difference that a 7-year head start can make in investing. I took it one step further and asked the question: What would it look like to start investing at age ZERO?

What's your take on passing wealth to the next generation?

[KaranMGurnani]

Congratulations on the new baby! She's lucky to have a father who's thinking about her long term financial future, good stuff :)

[watchdog]

I wish I had been aware of the importance of the time factor in compounding in my teens or early twenties (or my parents at my birth). They should teach these things in schools. And with regard to your question if it is right to start an investing account for young children: I think it's an extremely smart and helpful thing for your kids. Just don't tell them about it (except in your will), let them find their careers and keep the accounts up your sleeve for contingencies in your kid's lifes.

[bringvaluetomyworld]

Thank you for all your videos. I am French living in China and I have the same concerns for my kids.

[arthurvandenbroeck]

Congratulations on your baby girl Brad! I'm sure you will be a good provider for them :)

[PavolIvicic]

Congratulations on your baby girl Brad! Amazing content again. Couple of questions. Did you plan to open up UGMA/UTMA accounts for your kids? Secondly, how did you calculate the those investment returns? Crazy what $2, 000 can compound to in 60 years.

[rajessrani]

Great video!
How are you investing for your kids?

[cricbuzz]

Many congratulations Brad on your baby girl. Once again a great insight. Would you mind covering a video on how we can invest for our kids who have just stepped onto this world and kind of secure their future financially :-). I do agree with the insight you provided towards the end about the free money without work and is there a way we can make sure the money is given to them only after they have passed certain maturity age. That will be a request from my side. Thanks again.

[WISERandHAPPIER]

The key is to have you and your partner earn over the average wage and live off of 1 wage. This is very easy to do. Aim to retire at 35 :-). Brad must be at that point which is cool.

[antonpanferin-multibaggerh]

Hi Brad! Great insight as always. So what strategy are you going to use for this money? I guess maybe the MF would be the way to go. I personally consider doing it for my 1 year daughter. But really the last point, in my opinion, is much more important than the first. I also struggle with the idea of this money being a bad service for my kids, so maybe it would be nicer to set the whole thing the way so it can only be used for education for example. But on the other hand, maybe it’s just our fears and stories about reckless people playing lotteries (who the hell else would play the stupid lottery game if not a fool instead of contributing this money to investing account?) and then doing stupid things with the money they win (again, using their own money to buy the ticket in the first place also being a bad decision imo). So maybe it’s just upbringing. Because I personally wouldn’t in a million years spend the money if I won or inherited, but instead put it into great investments.

[arjannoordermeer]

Does some know some good valuation videos of Damodaran? Because he got a lot and don’t which videos to choose

[rossferguson]

I think it's worthwhile starting something like that for your kids....Hopefully that'll mean they'll put you in a decent old folks home when you're past it haha. Pabrai isn't handing all his wealth to his kids but he has said he's maxing out their tax free investments each year, Ive heard him mention that before, I think he said he puts 30k in a year.

[familydinner]

My sister’s birthday is 10/10! (1979... sorry Karin!)