Today, I was asked by a (younger) cousin to help them out with their Net Worth journey. They are fairly conservative by nature. Their Super has been producing yields of around 6% to 7% pa and I was insisting they should be getting 9%+. They were of the opinion that the 2% to 3% variance wouldn't make that much difference in the long-term. They were asking me why I am so adamant about Investment Returns and Compounding. It started out as a phone call; then I backed it up with an email. I thought I would share part of that email on PC as it might help other newbies. Here it is: "Returns and compounding are the name of the game. I assume you are aware of the Rule of 72. This rule means that: If one’s investments are Aggressive (say, 12% pa return), then one is aiming to double the value of their investment every 6 years (that is, 72 / 12%). If one’s investments are Balanced (say, 9% pa return), then one is aiming to double the value of their investment every 8 years (that is, 72 / 9%). If one’s investments are Conservative (say, 6% pa return), then one is aiming to double the value of their investment every 12 years (that is, 72 / 6%). If one’s investments are in Cash (say, 2% pa return), then one is aiming to double the value of their investment every 36 years (that is, 72 / 2%). Note:- these returns are before tax and before withdrawals. The lessons from the above:- Cash Only is risky (to Net Worth creation). Also, the above shows that it takes 50% more time for a Conservative Investment to reach the same destination as a Balanced Investment AND double the time as an Aggressive Investment. Therefore, Conservative Investment can be considered risky as well, especially if one is still reasonably young. I am not a big fan of Aggressive investments due to the risk of losing capital. In summary, I prefer Balanced investments or higher and, as one ages, one should lower the risk (and the return). I don’t know whether I will ever get as low as Conservative. If one looks at our Asset Split, one can see that we have a lot of growth assets (88%). Even if one looks at our Net Worth Split (assets – debt), one can see that we still have a lot of growth assets (83%)." That simple explanation really hit home for them and gave them a few things to think about. I hope it might make some sense to others. PS I selected returns like 12%, 9%, 6% etc to prove a point (and they were easily divisible into 72 ). Obviously, one can plug in one's own numbers to prove a similar point.