Compound interest turns people in to millionaires

Malthusian

Money Master The Game is full of absolute rubbish.

It is also full of some worthy and valuable ideas on saving and investing, but you can get those from numerous sources without being cut with absolute rubbish. A brief critique of some of the flaws in the book can be found here.

I am saying this because the first thing to understand is that when something in Robbins' book doesn't accord with reality, you shouldn't be at all surprised or think you're missing something.

Cash investments will only pay 10% compound interest if we're in a time of high inflation, which would mean that 10% compound interest isn't doing you much good. 10% annualised returns may be possible in the stockmarket, but it's an optimistic assumption, especially after you factor in tax and charges. For reference, the UK regulator requires firms in their illustrations to assume growth rates of 2%, 5% and 8%, with 8% per annum being "high".

If you invest £80,000 over 45 years (a very long time) at a very high rate of compound growth and it turns into £2.5 million it's not mindblowing, it's just maths. It certainly won't feel mindblowing in 45 years' time when you cash in your £2.5 million investment, because it won't buy you nearly as much in 2061 as it did in 2016. Almost everyone in the country well off enough to own a flat will be a millionaire by then. Imagine if you won £180,000 on the lottery today. A very nice sum of money - probably enough to pay off all your debts, have a nice holiday and put a deposit on a house, or even buy a flat outright in some areas - but not enough to give up work and cruise round the world forever. Well, that's what £2.5 million will feel like in 2061.

(Maybe. This assumes inflation over the next 45 years is the same as the past 45 years, which of course it probably won't be. But investment growth is partly linked to inflation so the point is relevant.)

Who has the same amount available for regular long term investment at age 20 as they do at age 40?

People always justify these self-help books with "well as long as it gets people interested in saving and investing it's a good thing". But unrealistic assumptions are not good for long-term investment - it can lead to disappointment and poor decisions.