$50/Week x 45 Years = $1 Millionare. Yep. Here’s the math; Many people think: “I’ll never be a millionaire!” But with the power of compound interest, and time, you too can have a million bucks and do something amazing with it – from starting off that pit bull sanctuary you’ve always dreamed of to buying your Mom a home in the Florida sun.
Here’s how:
Let’s say you’re in your twenties and you have about 45 years until you want to retire. (If you’re older, keep reading-the basic math still applies.)
If you invested $50 a week, in one year you would have put away $2,600 ($50 X 52 weeks = $2,600).
But in 45 years, those cash deposits alone would only add up to $117,000 ($2,600 X 45 = $117,000). How does that turn into a million?
Just add water. Every day that your money is invested, it gains interest, then your interest earns interest-and your savings begin to snowball.
Assuming your money earns about 8% per year, on average-a reasonable assumption-here’s how your savings would grow:
* In 10 years you’d have $40,000
* In 20 years you’d have $128,000
* In 30 years you’d have about $325,000
* In 40 years you’d have over $764,000
* By year 45, you’d have $1,001,605
You take it all. The best part: When you contribute money to a Roth IRA, you’ve already paid tax on it-and you don’t have to pay tax when you withdraw the money. That means you can withdraw $1,000,000 entirely tax-free!
Via our beloved money saving sisters at DailyWorth.com; DailyWorth is a free daily personal finance email for women. They deliver practical tips, empowering ideas and the occasional kick in the pants.