Many young people live for today. They really do not fully understand the power of compound interest. The difference between investing as little as $ 20 per week at age 20 or wait until the age of 50, more than $ 3,000,000 (yes 3 million). Do not wait start today!
Recently I was in a 7-11 and I watched as a young man Bought $ 10 worth of Lottery Tickets. As he walked away from the counter, he started talking to me. He told me he just turned 21 and he was worth $ 10 Buy Lottery Tickets Pick any six as long as he had a steady job. In Missouri, they have 2 Pick Six Weekly Drawings. I said to him: Here's my card call me and I'll show you a surefire way to become
Millionaire.
He looked at me and said, sure sure. I looked at him and said I meet you tomorrow across the street at the coffee shop and Coffee is on me would be morning or afternoon better. He replied, I get off work at 2:00 so I can here at 3:00. I said it's 03:00.
I went home and plugged some numbers in an Excel worksheet. Remember I did promise to this 21 year old boy making a millionaire. I was going to do what no one has ever done for me for him.
The results are telling. If my young friend were to invest his $ 20 per week and receive a 10% return on his investment
In 20 years when he is 41 he will have a little more than $ 66,000
In 30 years when he is 51 he will have a little more than $ 198,000
In 40 years when he is 61 he will have a little more than $ 550,000.
In 45 years when he is 66 he would have just over 920,000
In 50 years when he is 71 he would be more than $ 1.5 million.
As a young friend could average a 12% return, the figures still huge
In 20 years when he is 41 he will have a little more than $ 86,000
In 30 years when he is 51 he will have a little more than $ 307,000
In 40 years when he is 61 he will have a little more than $ 1 million.
In 50 years when he is 71 he would have more than $ 3.4 million
The above numbers are significant. Not only do they see my young friend the power of compound interest, but showing my young friend the power of Waiting. As an example if my young friend Will buy tickets for 10 years until he is 31 and then decide to take my advice and invest the $ 20 instead of $ 1.5 million when he is 71 to 10%, he would only $ 550,000. Wait 10 Years cost him nearly $ 1 million.
At 12% Return My young friend would lose more than $ 2.4 million difference between the $ 3,400,00 and $ 1,000,000
Now if my young friend were playing the Lotto for 30 years and wait until he is 51 to my advice he would lose. 3,300,000 at 12% more than the difference between $ 3,400,000 and $ 86,000
Mike Makler is a financial advisor in St Louis Missouri area specializing in Real Estate Loans and annuities. For more info call Mike ator visit Mike's web page:
No comments:
Post a Comment