2a:null 2b:["$","title",null,{"children":"Go Big, Then Stop | Tom MacWright | Observable"}] 31:[] 2e:{"id":"f554251b8f83c644","slug":"go-big-then-stop","title":"Go Big, Then Stop","thumbnail":"fc85666327d15b7da60acb77f64be305de9b555e56a4b7921aa33cbf15c6b421","access_level":"public","create_time":"$D2021-08-31T17:29:48.709Z","update_time":"$D2021-08-31T18:09:13.206Z","view_time":null,"first_public_time":"$D2021-08-31T17:51:04.883Z","fork":false,"stars":5,"starred":false,"owner":{"type":"team","id":"b47c3705cfcd7c1b","login":"tmcw","name":"Tom MacWright","avatar_url":"https://avatars-next.observableusercontent.com/669bdd774da8a1b9c1b7706ecbc1ea5136b9932c3d5e86b753aa5a098005f674","tier":"starter_2024"},"version":146,"publish_version":146,"role":null,"authored":false,"authors":[{"type":"individual","id":"0bf14b8d9c6eb88a","login":"tmcw","name":"Tom MacWright","avatar_url":"https://avatars-next.observableusercontent.com/669bdd774da8a1b9c1b7706ecbc1ea5136b9932c3d5e86b753aa5a098005f674","tier":null}],"members":[{"type":"individual","id":"0bf14b8d9c6eb88a","login":"tmcw","name":"Tom MacWright","avatar_url":"https://avatars-next.observableusercontent.com/669bdd774da8a1b9c1b7706ecbc1ea5136b9932c3d5e86b753aa5a098005f674","tier":null,"role":"editor"}],"comments":[],"custom_thumbnail":true,"trashed":false,"subscribed":null,"forks":1,"collection":null,"type":"notebook","body":{"title":"Go Big, Then Stop","cells":[{"id":0,"value":"# Go Big, Then Stop\n\nThis [article by Nick Maggiulli: _Go Big Then Stop_](https://ofdollarsanddata.com/go-big-then-stop/) fascinates me. I recommend reading it for context to this diagram.\n\n> You save as much as you can as early as you can, then you stop saving altogether (if you want). Go big, then stop.\n\nThe idea is that money you save and invest early ends up being a much larger portion of your eventual fortune, because of the power of compounding in the market.\n\nSee the chart below and drag the sliders to test out different scenarios of how long you spend saving, and how much that investment grows per year.","pinned":false,"hidden":false,"mode":"md"},{"id":132,"value":"

Start early / Start late

","pinned":false,"hidden":false,"mode":"html"},{"id":10,"value":"{\n let data = getData(growthRate, cutoff);\n return Plot.plot({\n marks: [\n Plot.line(data, { x: \"year\", y: \"early\", stroke: \"blue\" }),\n Plot.line(data, { x: \"year\", y: \"late\" })\n ]\n });\n}","pinned":false,"hidden":false,"mode":"ojs"},{"id":42,"value":"viewof growthRate = Inputs.range([0, 11], {\n value: 7,\n label: \"Growth rate (%)\",\n step: 0.5\n})","pinned":false,"hidden":false,"mode":"ojs"},{"id":55,"value":"viewof cutoff = Inputs.range([1, 20], {\n value: 10,\n step: 1,\n label: \"Year to start / stop saving\"\n})","pinned":false,"hidden":false,"mode":"ojs"},{"id":78,"value":"---\n\n### Scenarios\n\nThere are some interesting dynamics to this. One is that the cost of waiting longer to invest is entirely dependent on the rate of return. The article throws out 7%, which [some people – like Jack Bogle – would say is optimistic](https://www.cnbc.com/2017/03/22/jack-bogle-believes-the-stock-market-will-return-only-4-annually-over-the-next-decade.html). If you believe growth will be incredibly low, like 1%, the dream of working hard for a decade withers away.\n\nBelow we estimate 1% return, with the same starting assumption that you'll stop saving after a decade:","pinned":false,"hidden":false,"mode":"md"},{"id":137,"value":"

Start early / Start late

","pinned":false,"hidden":false,"mode":"html"},{"id":83,"value":"{\n let data = getData(1, cutoff2);\n return Plot.plot({\n marks: [\n Plot.line(data, { x: \"year\", y: \"early\", stroke: \"blue\" }),\n Plot.line(data, { x: \"year\", y: \"late\" })\n ]\n });\n}","pinned":false,"hidden":false,"mode":"ojs"},{"id":108,"value":"viewof cutoff2 = Inputs.range([1, 20], {\n value: 10,\n step: 1,\n label: \"Year to start / stop saving\"\n})","pinned":false,"hidden":false,"mode":"ojs"},{"id":88,"value":"The opposite holds true. If you think that the market will return 10%, suddenly you need to work a whole 7 years to get the same outcome.","pinned":false,"hidden":false,"mode":"md"},{"id":138,"value":"

Start early / Start late

","pinned":false,"hidden":false,"mode":"html"},{"id":91,"value":"{\n let data = getData(10, cutoff3);\n return Plot.plot({\n marks: [\n Plot.line(data, { x: \"year\", y: \"early\", stroke: \"blue\" }),\n Plot.line(data, { x: \"year\", y: \"late\" })\n ]\n });\n}","pinned":false,"hidden":false,"mode":"ojs"},{"id":112,"value":"viewof cutoff3 = Inputs.range([1, 20], {\n value: 7,\n step: 1,\n label: \"Year to start / stop saving\"\n})","pinned":false,"hidden":false,"mode":"ojs"},{"id":12,"value":"getData = (growthRate, cutoff) => {\n let savings = 10;\n let rate = 1 + growthRate / 100;\n let data = [{ year: 0, early: 0, late: 0 }];\n let lastEarly = 0;\n let lastLate = 0;\n for (let year = 1; year < 41; year++) {\n let { early, late } = data[data.length - 1];\n if (year <= cutoff) {\n early += savings;\n }\n if (year > cutoff) {\n late += savings;\n }\n early *= rate;\n late *= rate;\n data.push({\n year,\n early,\n late\n });\n }\n return data;\n}","pinned":false,"hidden":false,"mode":"ojs"}],"files":"$W31","stdlib":"1","titling":"auto"}} 2f:"$2e:body"