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Author: YoungInvestor99 One star, 50 posts CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 83  
Subject: Re: New to investing Date: 5/17/2008 10:43 AM
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To give you an idea of what an incredible advantage anyone starting out young has, check out this table:

A Dollar A Day Invested

At Various Interest Rates For 66 Years

Invest In Interest Amount Accumulated
(Hidden in a mattress) 0% $24,000
(In a savings account) 3% $77,000
(Certificates of deposit) 5% $193,000
(Corporate bonds) 8% $1,000,000
(Growth mutual funds) 10% $2,700,000
(Aggressive growth mutual funds) 15% $50,000,000
(Real Estate, businesses) 20% $1,000,000,000
(That's One Billion!)


Now, being that your only 17, I imagine you've only been alive about 5 or 6,000 days, so you could probably save that much money in the next couple years if you really tried and catch up.

You have to account for the missed interest during that time though, so probably 10,000 would really catch you up to the dollar a day plan. I know you could do that if you really tried, and maybe got your parents to help out too, and match every dollar you save.

Keep in mind, 10% is the average return of the S&P 500 index for the past century, which is extremely easy to invest in. So it is very, very likely if you begin to invest now, and learn to save all your money, you could accumulate 2.7 million dollars in your life time.

Now imagine if you could save more than one dollar a day!

Just two dollars a day and you would have more than double 2.7 million thanks to compound interest. It would probably be well over 6 million dollars to retire on.

If you could do 3 dollars a day, which is very easy to do... well, it would be over 9 million. And you can just keep on going with those numbers and see how awesome it can get. I think most people should really be saving at least $20 a day.

That is the kind of stuff that will get you wanting to read more investment books and save more money.

It is very easy to do, but notice the key ingredient is time, it takes 66 years for all this to happen and for compound interest to work its magic. And chances are excellent that with life expectancy increasing as it is, you probably still have closer to 66 years of life left, or close to it anyway.

That is the incredible advantage you have now.
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