Most of us would like to have a million dollars cash at some point in our life. Most of us also work 40+ hours a week at our job (or jobs, whatever the case may be). What little amount we save can and will accumulate over the years, but the odds of reaching the $1 million mark is relatively small.
However, if we take the power of compound interest, then we can begin to realize our $1 million goal:
For instance, let's say you decide to invest
$100.00 per month in an investment that yields 6% interest compounded monthly, for the next 30 years. In 30 years, you would have
$100,451.50! That's not too bad, considering you made $64,451.50 in interest (money you didn't have to begin with). Now, let's say you kept that up another 10 years. You would then have
$199,149.06. In 10 years, you almost
double the value of your investment.
I find that teachers don't emphasize this enough in school. If they illustrated this concept, then we may have more millionaires at 60 than we do now. Think about it. You're 18 years old. You decide to invest
$67.00 per month in an annuity (ex: a mutual fund) that yields 12% compounded monthly. You would have $1 million by the time you are 60. Imagine retiring at 60 with $1 million in cash! Even better. Let's say you continued with the plan for just 5 more years. Incredibly, you'd have
$1,822,097.00! In 5 years, you almost make another million!
