The Margin: It ain’t a bear market for Bobby Bonilla. How the former Mets player’s financial feat illustrates magic of compound interest.

by | Jul 1, 2022 | Stock Market

Bobby Bonilla was trending on Twitter early Friday (as it tends to this time of year), because July 1 marks the annual $1.2 million payday for the former third baseman — an event that has increasingly attracted interest from average Americans, even some who don’t know anything about baseball. That’s because Bonilla and his agent, Dennis Gilbert, engineered a contract payout that has become one of the more talked-about feats of finance in sporting history.

On Friday, Bonilla, now 58, will collect a check for $1,193,248.20 from the New York Mets, as he has and will every July 1 since 2011 and running through 2035, as ESPN has detailed. Commentary: How to have your own Bobby Bonilla Day Some have described Bonilla’s payout as one of the great examples of compound interest, because the baseball player opted to defer a $5.9 million payment in 2000 in favor of spreading payments out over 24 years, starting in 2011, with an 8% annual interest rate. Compounding is when you earn interest on your earned interest, which can have a powerful impact over time. The net payment for Bonilla (and his agent) will be about $30 million when the baseball player turns 72. That amounts to a heck of a retirement plan if you are fortunate (or smart) enough to score it. Related: Retirees on edge over inflation and stock volatility can take these 5 steps See also: Based on 19 bear markets in the last 140 years, here’s where the current downturn may end, says Bank of America To be sure, we have written about thi …

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