If you got 4% a year for 20 years on your $1k (unrealistically low over the long term) and never added another dollar between now and then, you'd have 2191.12.
If you got 8%, which is a very safe bet on an index fund over the long term, you'd have 4660.96, again if you never added another dollar over the next 20 years.
If you add even $1k a year between now and then, you get compound interest throughout the timeframe on all that money, and will have a nice chunk of change to hand the kid at 21 that he could use for any number of productive things such as education or a house downpayment, etc.
There is no gun or commodity that is going to reliably keep up with that... period.. end of story. A gun is a terrible use of the money.
Totally unfair comparison. First, if you could guarantee 4% return, you'd be a billionaire. Banks 'guarantee' under 1%. An 8% return is far fetched to maintain in TODAYS markets. And the individual is 2, and will start college presumably in 16 years, not 20. The best current 5 year CD rates are under 2%, or below the cost of inflation.
By the way, inflation since the year 2000 has been 35%! Thirty Five percent!!!! That eats away at most investments. Throw on taxes, lost opportunity costs, and risks... and the markets are not that attractive anymore. That's nearly 3% per year in lost money simply due to the cost of inflation. Your cash lost 3% and even an unrealistic 8% return during that period is only 5% purely due to inflation (not counting all other costs).
Second you're talking about compounding interest at rates that are not common for standard investors, and dollar cost averaging. Do the same with guns, ammo, and other tangible items like gold, silver, land, etc. and the individual would be much better off. The cash won't be enough to dent a college plan at current rates. And they are rates that are not likely in the future. I'll repeat, our wealth is built and based on fiat currency, loads of borrowing, formerly cheap and plentiful oil, and world dominance. These are all slipping away rapidly. The party is over brother.
I know my guns and ammo that I bought 10 years ago and over the last decade did better than the markets overall, AND I had something tangible.
Remember the panic when people lost 1/2 of their assets and retirements in 2008 in a matter of days? I learned a long time ago to stop putting money into a fiat investment pyramid scheme...
The fallacy that we can just beat this debt crisis, and looming other problems... the problems are built in to the way our government operates. We depend on:
1. Oil. Read up on Peak Oil. It's a finite resource that is irreplaceable at the investment/return rate.
2. Manufacturing. Gone and hard to bring back. We've lost the infrastructure, and for complex global-political reasons we cannot compete with foreign markets in manufacturing. Companies can't pay American workers and consumers can't afford American manufacturing (in general - there are notable exceptions).
3. Political structure that is inherently defective once the social welfare programs are implemented because nobody will cut them because that's political suicide. We need only look at the currently divided landscape and petty infighting among our leaders.
We are fighting ourselves, human nature, and science/math. The greatest generation won wars because we could kill our way out. We lost wars because we could not, nor could we adapt to the way our enemies fought. Same is true now with the debt war. Sadly, the only solutions are 1) stop spending or 2) pay it back or 3) a combination. Sadly, we demonstrate every year we don't have the appetite to stop spending and are accumulating massive interest debt, and we also just don't have the money to substantially repay the debts. We can't bomb or negotiate our way out of this mess. And much of the world wants us to collapse... Nobody will make the tough cuts ... and we're in a death spiral. Refuse to see it. I don't care. Just giving my educated and experienced opinion.
As far as young people - I try to be optimistic. But remember that I'm part of the less than 1% of young men and women that served in the military. Sure, maybe another few percent volunteer or do other pay-it-forward activities. But let's be real. Contrast those few percentages that give back to society to the 1/2 of America that is on public assistance.... or the 'on the dole.'
PS - in the 5 minutes it took to write this, our National Debt accumulated another $10,000,000 ...
http://www.defeatthedebt.com/understanding-the-national-debt/how-much-do-we-owe/
I have drifted, and know this is not a tutorial on investing or my theory of we are all doomed. So I will simply say now:
Take that money, buy a $700 AR, 10 mags for $100, and $200 in ammo. Put it away. You'll thank me.