The Teacher’s Paradox
If our teachers are so smart, why are they universally underpaid? Do millions of facts paralyze their analytical functions? Were teachers smarter, they would support social programs that elevate the economic fortunes of individuals like themselves not programs created to make everyone equal to their economic misfortune. Below we introduce a program that will make all teachers millionaires that was lifted right out of their own textbooks.
The magic solution in Math 101 is called compounding. It tells us that in 40 years adding $1 a year to an account that is growing at the rate of 10% a year generates a $443 nest egg. That’s right a 40-year investment of $1 a year “compounds” at 10% a year into a $443 nest egg.
This magic applies to teachers as well. If your average teacher makes $40,000 a year (poverty level in many big cities) and has 15% withheld for her retirement and old-age medical needs, that $6,000 withheld each year of her 40-year working life and invested in the stock market snowballs into $3.2 million nest egg at retirement. If in her 41st year she makes 10% again her monthly check just off the income from her nest egg is $27,000 a month. The average rate of return for the S&P 500 index has been 12.8% per year over the last 30 years.
Now you would think that the educational establishment, that bastion of learning and progress, would promote a principle that not only makes teachers but everyone else rich – but they don’t. They promote the concepts of socialism, equality, economic justice and as a whole are rabid anti-capitalists. Their own mammoth National Education Association supposedly spent several hundred million dollars out of the teacher’s union dues to defeat a proposal based on “compounding” that George Bush introduced in 2005.
How can the educational establishment teach “compounding” and totally ignore its application to themselves and our society. In what dark chamber of the mind does an error of omission like this take place? I don’t think it is a perfect corollary, but indoctrination of children to the evils of capitalism is high on the list of the objectives of the communist party. No one thinks the majority of teachers are communists but their failure to emply compounding makes their actions suspicious.
Compounding is not lost on the rich in society. They grow their accounts into fortunes using compounding. You have heard the old saw it takes money to make money. That is compounding’s theme song. Unfortunately the poor and middle-class which includes teachers seldom have the money (a pool of capital) to make money. Their salaries are used just for survival not saving and investing.
We at the Ownership Society Institute are dedicated to getting the poor and middle-class a pool of capital to compound during their life into that $3.2 million retirement nest egg and the affluent life-style $27,000 a month will provide. If you are interested and wish to help yourself and the less fortunate, please visit our website at www.riseupamerica.us and make a contribution to our effort. It will take your support to effect this positive change to America’s economy and the fortunes of teachers as well as everyone else.