Fribble Who Wants to Be a Millionaire?

By (James Buell)
August 30, 2000

The other night I was playing TV roulette and happened upon the hit show Who Wants to Be a Millionaire? Normally, I wouldn't have even stopped on this channel because I think this type of entertainment fosters the myth that the only way to become wealthy is to have someone give you the money. Fortunately or unfortunately, the timing was such that the contestant was just starting to answer the questions.

I have to admit that I did watch for a few minutes. As I did, I realized that what was happening on the show was probably what keeps a lot of people from ever starting to save and invest for their financial future (and to have the patience to hang in there for the long term). The correct answer to the first question was rewarded with a prize of $100. Whoop-dee-do! The question was a creampuff -- a no-brainer. With the correct answer to second question the contestant got double that: $200. This process was repeated again for the third question, and so on. The show producers must have encouraged the contestant to give quick answers so as not to stretch this early part out too long.

When you put a small amount of money to work for you and its value doubles, the increase may still be a small amount of money. Over time, as it doubles again and again, it does become a large amount of money. So this was "instant compounding."

Often when I meet people who care to talk about financial issues, I ask them if they understand the rule of 72. This is the accounting formula that allows you to calculate how long it will take you to double your money. You divide 72 by the annual rate of return on your investment, and that gives you the number of years it will take to double your money (e.g., a 12% annual return will double your money in 6 years -- 72 divided by 12 equals 6). How did I get through school without being taught this important principle?

Most people that watch Millionaire, I imagine, dream that someday someone will give them a million dollars and/or that they'll have a lot of money. As I sat there and watched, I dreamed that one day more people would learn that if you begin with $100 and make good investments, you really could learn how to turn $100 into a lot of money. I dreamed that people would participate in this process and enjoy watching their nest eggs grow. How wonderful to know that their dependence on others for financial support shrinks as fast as their portfolio expands.

I still don't watch the show and I haven't been tempted to roulette onto it again. I don't think the producers will change the format to encourage prudent investing -- but it is nice to dream!