The Illusion of Growth

by

The aspiration to accumulate a sum—eight hundred thousand units of currency, to be precise—appears, on initial consideration, a perfectly reasonable ambition. Yet, the mechanics of its attainment, when subjected to even cursory examination, reveal a system predicated on a series of increasingly improbable assumptions. The passive accumulation of wealth, it seems, is less a matter of diligent application and more a deferral to forces beyond individual comprehension. One is presented with a proposal—the ‘Schwab U.S. Dividend Equity ETF’—a designation that carries the weight of official sanction, yet offers little in the way of genuine explanation. It is a name, a label affixed to a process, a process that, like all such systems, demands a certain suspension of disbelief.

The promised byproduct of this accumulation—twenty-four thousand units of currency annually, delivered as ‘dividend payouts’—is presented as a ‘gift.’ A curious characterization. Gifts imply volition, generosity. This, rather, appears to be a calculated return, a predictable consequence of participation in the system. It is a reassurance, perhaps, offered to quell the inherent anxiety of entrusting one’s future to the vagaries of the market. The implication, unspoken, is that this flow of currency will continue indefinitely, a perpetually self-renewing source of comfort in an otherwise unpredictable existence.

The Index and Its Logic

The mechanism by which this accumulation is to occur involves adherence to a pre-defined index—the ‘Dow Jones U.S. Dividend 100’—a construct that operates according to criteria known only to its architects. These criteria—’financial stability,’ ‘strong cash flow,’ ‘proven track record’—are presented as objective measures of worth, yet they remain stubbornly resistant to independent verification. The index, it seems, selects companies not on the basis of inherent value, but on their ability to conform to its arbitrary standards. The resulting portfolio—populated by entities described as ‘boring’ rather than innovative—is a testament to the triumph of conformity over ingenuity. A significant proportion—over nineteen percent—is allocated to ‘energy companies,’ a sector whose long-term viability is, to put it mildly, uncertain. Another twelve percent is devoted to ‘industrial companies,’ whose relevance in an increasingly digitized world is open to question.

The top holdings—’Lockheed Martin,’ ‘Chevron,’ ‘Merck & Co.,’ ‘Home Depot,’ ‘Bristol Myers Squibb’—are presented as exemplars of stability. Yet, each of these entities is subject to the same forces of market fluctuation, regulatory change, and unforeseen disruption as any other. The illusion of security is maintained by the sheer scale of their operations, a vastness that obscures the underlying fragility. They do not promise exponential growth; rather, they offer the promise of not losing too much, a subtle but crucial distinction.

This reliance on established entities—on the avoidance of ‘flashier’ companies—is presented as a virtue. Yet, it also represents a tacit admission of the limitations of foresight. The system, it seems, is designed not to discover value, but to preserve it, to shield itself from the inherent risks of innovation. It is a fortress built on the foundations of obsolescence.

The Calculation and Its Presumptions

The assertion that consistent investment—five hundred units of currency monthly—could yield eight hundred thousand units of currency in twenty-five years is predicated on a single, crucial assumption: an average annual return of twelve percent. This figure, derived from ‘past results,’ is presented with a studied nonchalance, as if the future were merely a linear extrapolation of the past. The inherent absurdity of this proposition is masked by the presentation of a table, a neat grid of numbers that obscures the underlying improbability. The projected accumulation—two hundred twenty-two thousand units of currency after fifteen years, four hundred twenty-nine thousand after twenty, seven hundred ninety-two thousand after twenty-five, one million four hundred thirty thousand after thirty, two million five hundred fifty thousand after thirty-five—appears almost inevitable, a mathematical certainty. Yet, it is, in reality, a fragile construct, susceptible to the slightest perturbation.

The dividend yield—averaged at 2.8 percent since inception, 3.2 percent in the past decade—is similarly presented as a stable, predictable variable. The assumption that this yield will remain constant—at 3 percent—is a convenient fiction, designed to bolster the narrative of consistent growth. The calculation—that an eight hundred thousand unit position would yield twenty-four thousand units annually—is presented as a straightforward consequence of this assumption. The unspoken implication—that this flow of currency will continue indefinitely—is, once again, a testament to the power of self-deception.

These projections, these calculations, are presented not as predictions, but as illustrations. The disclaimer—that ‘there is no way to predict’ future performance—is offered with a perfunctory air, as if it were merely a formality. The underlying message—that consistent investment, coupled with a generous dose of optimism, can overcome the inherent uncertainties of the market—remains unchallenged. It is a comforting illusion, perhaps, but an illusion nonetheless.

Read More

2026-01-25 03:33