They
should teach this in High School ......but they don't. Is it because
they want you to be dependent on Social Security? Do you think Social
Security will provide you the life-style you want when you retire?
I don't think so!
It
has been called the 8th wonder of the world, Compound Interest. How
can it work for you? If, when you turned 18 you were to put $1 a day
toward your retirement, do you think you could retire with the life
style you wanted? $1 a day from age 18 to age 65 would be a total
investment of $16,790. Not enough to retire on! But if you invested
that $1 a day, $30 a month, in Equity Oriented Mutual funds from age
18 to 65. And you averaged 15% (not impossible with a little work)
That same $16,790 would grow in to over 2 million dollars. The magic
of compound interest!
But
you're not 18! If you are 30, and you want to retire with the same
$2,000,000 you would need to invest $140 a month at 15% interest.
If you are 40 you would need to put away $650. If you wait until you
are 50 you would need to come up with $3,000 a month. for the same
results. The point, Pay your self First. Start saving today! Don't
put it off one more minute. No one knows what interest rate you will
be able to average on your money, but I do know if you wait until
next month or next year to start, you lose. Lets see another example
of the magic of compound interest.
If,
the day you were born, someone put $1 a day into a box for you, at
age 65 you would have about $25,000 in the box. Had that same $1 a
day were put into a pass book account that paid 3%, at the end of
the same 65 years you would have $75,000. At 5 % interest, your $1
a day would have grown to almost $200,000. Now we are beginning to
talk about real money. If an investment of 10% was utilized, your
$1 a day would grow into a staggering $2.75 million. Now lets dream,
at 15% your $1 a day would grow to $50 million and if you could some
how receive 20% your $1 a day would grow and grow and grow in to an
unbelievable one Billion dollars. Wow! Compound interest is the eighth
wonder of the world.
One
final example that I hope spurs you to action NOW! If at age 21, you
put $166 a month ($2,000 a year) in to an IRA that earned a moderate
10%. And for some reason you stopped contributing at age 27, you only
contributed for 6 years, at age 65 you would have $1,000,000. However,
if you waited until you were 27 to start your $166 monthly deposit.
How long do you think you would have to contribute that $166 to retire
with the same $1,000,000. Remember, everything else is the same, 10%
interest, $166 a month, you just waited six years to begin. How many
years would it take? 12 years? 24 years? No, every year, all 37! By
just waiting 6 years to begin you would have to contribute for 37
years instead of 6 years.
So
when are you going to start? Today or tomorrow, or will you wait 6
years! It is up to you! It is your future.
