So, how big IS £1 trillion?
S
ome weeks ago, I raised the question as to exactly how big is one trillion pounds? To put it in perspective, I wondered how long it would take to accrue £1 trillion at £1 per second. The question was based on calculating an imaginary date of birth for someone who had saved £1trillion since birth. A faltering start saw a few people snatching numbers from the air; 1542 was suggested, supported more by hope than calculation. One respondent noted ‘it is quite straightforward’. However, a few pitfalls exist in calculating a date.
Cutting to the chase, the year of birth would be 29,700BC(!). Yes, you read that correctly; it would take 31,709 years, 289 days 1 hour, 44 minutes, 42 seconds.
Alistair Mann gives some advice on making the most of your £’S
years assumed money put aside without any investment return.
But assume you wanted to save £1trillion and could afford to save £1 a second (or £86,400 a day!). If you could achieve 5% return on your money, how long would it take? Without interest it takes 31,709 years, so you might be surprised that with 5% pa interest, it’s only 148 years. (The ‘first’ £86,400 is worth £118 million after 148 years at 5%).
So for someone to have saved £1trillion by 6th August 2010 (discounting leap years) takes us back to 20th October 29700BC. We can even speculate the time of birth to be about 10:15 on the night of 20th October. And we have a winner!
Hearty congratulations to Mr John Bunting from Milford for his correct answer and a cheque for £150 is on its way. Almost as successful is Mr Francis Bell, but a day out at 21st October. £50 is on its way. Another 4 entrants were within a year. To illustrate the enormity of the sum, 7th and 8th closest answers were a thousand years away (!). Anyway, apart from idle curiosity or trivial amusement, the point is to appreciate the significance of large numbers. However, there is a further point here, because the 31,709
CHARTERED FINANCIAL PLANNERS v v
Independent financial planning advice for all aspects of • Investments • Inheritance Tax • Retirement
CHARTERED FINANCIAL PLANNER Supported by
ALISTAIR MANN FPFS Alison Brent - Client liaison
CHARTERED FINANCIAL PLANNERS v v
Independent financial planning advice for all aspects of • Investments • Inheritance Tax • Retirement
it’s done with maths. Your bank account may pay no interest at all, whilst every £10 you have in the bank now that is still there in 10 years time is £10 saved, but it’s also possibly £6.30 lost if you could have invested at 5% pa elsewhere.
For advice on your savings and investment options and on funds that consistently give you over 5%pa return – even over the last 3 years - contact my office for an appointment. Mention Look Local or bring your Cobham Village Card and claim a 1% cashback voucher.
Alison Thomas - Office Management & Accounts Sheryl Reid – Client records & reports Elin Egan - Client Valuations
21A HIGH STREET, COBHAM, SURREY, KT11 3DH Tel: 01932 863400 email:
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Most people probably can’t afford to save £86,400 a year, nor to save for 148 years. But then most of us don’t need to save £1 trillion. However, most of us DO NEED TO SAVE – for reasonably long term aims, whether we call that retirement or just rainy day money. If you want £10,000 in ten years, would you rather invest £64 each month at 5% return or £79 at 1%? For £100,000 in 20 years, the choice is £242 or £376. Effectively, the choice is active or passive saving, thought or blind hope. A bit like guessing 1542 in the competition. But with saving, it’s not ‘done with mirrors’,
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