Friday, March 4, 2016

Show Your Kid How To Turn $2.99 into $1M

Today’s fantastic family finance article is:

Compounding Interest Change Chart


Pose this money question to your child today:

If you save just $2.99 per day and earn an 8% return1, how long will it take for that initial $2.99 to grow to over 1 million dollars?

54 years according to the calculation in today’s article.

That’s pretty darn impressive.

Now list a couple everyday items that cost $2.99 or more. Grande latte. Burrito. An online game. Maybe becoming a millionaire isn’t just for the ultra brilliant or the ultra lucky after all. A little discipline and a lot of time go a long way.

The upshot? Start early enough with as little as $2.99, and compound interest can still work its magic.

Kids just can’t hear that enough.

1Why 8%? That’s roughly the long term historical annualized return of the stock market, give or take a percentage point. Want to play around with the actual figures for the S&P 500 over different date ranges? Check out this cool calculator.


No comments:

Post a Comment