Mark Twain's $70,000 house -2019-04-18

Mark Twain, the legendary author, deciding to build a house in 1881 for $70,000. That's exactly what he did with his Hartford, Connecticut home, and 138 years later, we can't help but wonder: was it a brilliant investment or a colossal missed opportunity?

Let's do some Twain-sized calculations. If that $70,000 had been invested instead, earning a consistent 10% annual compounded return, it would have ballooned to a staggering $36 billion today. Yes, billion. One could imagine Twain wryly commenting on the irony of foregoing such a sum.

Now, Twain's house did get an upgrade: a $16.3 million visitor center, preserving his legacy. And in 2000, it was drawing 50,000 tourists, each spending an average of $100, generating $5 million in revenue.

But here's the rub: from a pure investment perspective, it's a tricky call. Land value is a huge factor, and unless you're in a booming metropolis like Singapore or New York, appreciation can be unpredictable. Was Twain's Hartford location a long-term goldmine, or did his investment in bricks and mortar ultimately pale in comparison to the potential of compounded interest?

The Mystery of Twain's $471,000 Estate: A Tale of Compounding and Legacy

Upon his death, Mark Twain's estate was valued at $471,000. However, the New York Times estimated its worth at $13 million in 2014. That's a fascinating leap! Reverse-engineering the numbers, they seem to have used a 3.24% annual compounded interest rate over 104 years.

Now, what if that estate had been invested more aggressively, achieving a 10% annual return? By 2014, it would have been worth a mind-boggling $9.5 billion. One can almost hear Twain's sharp wit, lamenting the "lost" billions with a characteristic blend of humor and cynicism.

The Intriguing "What Ifs" of Twain's Wealth and Legacy

It's always captivating to explore the "what ifs" of famous estates, especially one belonging to a figure as iconic as Mark Twain, to play with the numbers and imagine the potential fortunes. These calculations inevitably lead me to ponder my own legacy: how much will I leave behind, and how long will it last?

It's a reminder that wealth isn't just about accumulating money; it's about understanding the power of compounding, the nuances of investment, and the unpredictable nature of time. Whether it's a house built in 1881 or an estate left decades later, the stories behind these numbers are always compelling, and they invite us to think deeply about our own financial journeys, and the legacy we wish to leave, just as Mark Twain did with his words and his home.

Comments

Post a Comment

Popular posts from this blog

Reflections on 13 Years of Investing: A Wake-Up Call in 2024 -2025-01-28

After 13 years of investing, countless theories, and extensive study, the year 2024 has been another wake-up call for me. Looking back, my approach to long-term investing in the past was, in reality, still short-term and speculative. I would sell stocks when I believed their prices were too high, trying to time the market. This behavior, though seemingly logical, was speculative in nature. Warren Buffett’s teachings have made it clear that true financial growth comes from holding onto good companies for the long term. It’s important to remember that when we buy shares, we’re not just buying numbers on a screen—we’re buying a piece of a company. There are two ways to make money from the market: Speculation: Selling to someone willing to pay more than you did. Ownership: Earning profits as the company grows and performs well. Warren Buffett has shown us that while the first method can help accumulate an initial pot of gold, it’s not sustainable. It requires constant effort, exceptional f...
Read more

Property market - 2024-03-15

I came across an article claiming that China’s property market will be fine. The article cited a shrinking population, which could lead to more people concentrating in cities, creating demand for housing upgrades. It also pointed out that the average house size is still relatively small. The article seemed promising, suggesting that property developers are a good investment option. But hold on—why are China’s property developers going bankrupt? The article fails to address the real issue: property developers have taken on a massive amount of debt! Overleveraging can be disastrous if they are unable to sell properties, collect payments, or face project failures. It’s dangerous to rely solely on market analysis like this, as it won’t necessarily lead to success. We need to conduct our own analysis. If a company is overly reliant on debt to fund its operations, it will struggle when the economy worsens, and income drops. We should focus on individual companies that don’t depend on borrowi...
Read more

Rethinking Everyday Habits: The Lesson of the Towel - 2025-01-28

My big, fluffy towel. It was practically a family traditional. My mom used one, I used one – it was just the towel. Sure, it was a bit of a pain. After a wash, it took forever to dry, and packing it for trips was like wrestling an octopus into a suitcase. But hey, that's just how it was. For 40+ years, I never questioned it. It was my towel, end of story. Then, one day, I had a moment of… towel enlightenment. I decided to try a smaller towel. And guess what? It was perfect . Compact, quick-drying, easy to wash. Suddenly, travel became a towel-packing breeze. I could even clip it to my bag to dry! It was a revelation. Forty plus years I used a giant towel simply because that's what I'd always done. It hit me: Just because we've always done something a certain way doesn't mean it's the right way, or even the best way. My towel epiphany taught me a valuable lesson. Sometimes, we need to stop, take a look around, and ask, "Is there a better way?...
Read more