It Really Pays to Save!
“Steady plodding brings prosperity; hasty speculation brings poverty.” — Proverbs 21: 5
It Really Pays to Save!
Saving money can be tough, but it’s a smart habit that can pay off when you need it the most. The earlier you start saving and investing, the more time your money works for you to achieve your goal of financial independence.
The best way to save is automatically. Contact your employer’s payroll department to arrange for an automatic withdrawal from your paycheck to your savings account, mutual fund or other investment. Soon, you won’t even miss the money deducted from your paycheck since you’ll adjust your lifestyle to live on what’s left. And down the road, the money you save today can make a tremendous difference to your way of life in the future.
Look at these examples:
$100 saved every month for 40 years at 12% interest will grow to $1,176,477.
Just $1 a day for 49 years invested at 12% interest will grow to $1 million.
Saving $65 every month for 45 years at 12% interest will give you $1,394,555.
$253 invested every month over 20 years at 12% interest would yield a cool quarter million ($250,281).
Even $102 invested each month for 20 years grows to a six-figure retirement nest egg of $100,904. And that amount invested at 12% would pay you $1,000 every month FOREVER if you live off that income and don’t touch the principal!
The Power of Compounding
While the interest rate is important, it’s interest compounding that really makes your investment grow. For instance, money invested at 12% will snowball into a nest egg more than twice as large as the same amount invested for the same length of time at 6%, even though the interest rate is just twice a high:
$100 invested monthly for 20 years at 6% = $46,204.08 $100 invested monthly for 20 years at 12% = $98,925.53
In this example, the Power Of Compounding makes your investment grow an extra $6,517.37.
Why? Because each month, your investment pays not only on the money you’ve deposited, but also on the interest your investment has already earned. This escalated savings is the Power of Compounding!
Just look at THIS TABLE to see for yourself.
To find out how fast your savings can add up, CLICK HERE for a handy Saving/Investing Calculator. Fill out the form by entering the dollar amount you can save every month, plus the interest rate your bank or other investment pays.
You’ll be amazed at how fast your money can grow, one small step at a time!
“The most powerful force in the universe is compound interest.” — Albert Einstein
Want to find out why it pays to save (and save early)? A little lesson called The Money Tree tells the big story!