I was talking to a friend a while back and he was talking about the 14% he had averaged over the past like 20 years. I was like thats incredible how do you calculate that with all of your accounts and he said he had a spreadsheet. I always like messing with spreadsheets and asked him to send me a copy. and he did send me an empty one.
He had it like year 1 = X%, year 2 = Y%, year 3 = Z% and so on. then it had the total of all the percent and divided it by the number of years. and I was like oh no. I figured the math ant it was closer to 9%. nothing to be ashamed of but i kind of sent him an email explaining all of it (i did if you had $100 and gained 100% one year you had $200. the next year you gain -50% and it goes back to $100. in real life investment returns you had a 0% return. on your spreadsheet you would have a 25% annual return but have 0 dollars to show for it) he was like that's not how it works and i was like okie dokie. He doesn't talk to me about investing anymore.
He had it like year 1 = X%, year 2 = Y%, year 3 = Z% and so on. then it had the total of all the percent and divided it by the number of years. and I was like oh no. I figured the math ant it was closer to 9%. nothing to be ashamed of but i kind of sent him an email explaining all of it (i did if you had $100 and gained 100% one year you had $200. the next year you gain -50% and it goes back to $100. in real life investment returns you had a 0% return. on your spreadsheet you would have a 25% annual return but have 0 dollars to show for it) he was like that's not how it works and i was like okie dokie. He doesn't talk to me about investing anymore.
Statistics: Posted by hnd — Tue Jun 04, 2024 10:42 pm