Turn $1 a Day into $67,815

Here's an article from MoneyCentral that anyone can love. The summary:

Want a foolproof way to turn $1 a day into $67,815? It doesn't take a lot of money or time or personal sacrifice. There's no magic, no multilevel marketing and no salesman will call at your door. In fact, it's the simplest and most-proven way to get richer, and if you extend this concept to other parts of your life, you could end up with an enviable retirement nest egg.

Wow! Sounds like my kind of deal. Please continue:

To start, all you have to do is take your pocket change at the end of the day and drop it in a jar. If you can do that, and you put away about $1 a day, that's just $7 a week. At the end of the month, you'll have about $30.

Every month, deposit your savings in a Roth IRA account, where it can grow tax-free and -- more important -- be withdrawn tax-free in the future.

Sound simple? It is. Plus, it can really add up over time:

What's a paltry $30 a month going to do for you? Growing tax-free for 30 years, with a 10% annual return, your investment account will be worth $67,815.

Not bad for pocket change, but that's just the beginning. The piece gives some tips on how to save $123 per month, then does this math:

If you can knock this $123 out of your monthly budget, at 10% it will grow to $278,040 in 30 years. You've practically financed your retirement with just a few small sacrifices.

A small amount over a long period of time can really add up. Get started today on your financial windfall!

Comments

[Dan Meyer]

When I worked for a CPA firm in Northeast Mississippi in the late 1970s, an otherwise racist (at least by 2005 standards) co-worker told me a
similar story. Apparently, Booker T. Washington or one of the faculty at Tuskegee told black families in the early 20th century to save back a nickel out of each week's paycheck. Those that did apparently had less pain during the Great Depression than many of their white counterparts.

[s g]

if you saved all the change at 20% you would have over 125,000

[s g]

if you saved all the change at 20% you would have over 125,000 at 40% 250,000

[Michael Blackburn]

If you know a place with a risk-adjusted 20% return, please do tell! Even sustaining 10% in an aggressive stock/bond retirement portfolio over the next 40 years is ... optomistic. My retirement plans are based on an 8% return over the life of the account. When you adjust that for inflation, you're talking about a 5% real return.

While "a dollar a day" is a good way to illustrate the power of compounding interest to newbies, you're better putting as much money away today as you can. If you're banking on the stock market continuing the pace of the last twenty years or the magical compounding fairy to make your retirement comfortable, you're asking to be gravely disappointed.

[Mr. Economy]

I'd love to know where you can earn 10%. Even 8%. My local banks/credit unions pay 4.50% for a 5 year CD.

If you saved $30 a month in the stock market, it would cost you $12 just to buy stock.

It sounds like one of those insurance guys selling annuties to me.

[Skott]

Here's a simple way of illustrating the wealth potential for saving just $1 a day:

Every $1 a day you save can be $100,000 when you retire.

Explanation/Details: Investing just $365 annually, first day of the year, in a Roth IRA assuming 8% rate of return... in 40 years it's just over $100,000. Your actual contributions total just $14,600.

Add some simple math and $10 a day starting at age 25 makes for a $1,000,000+ balance at age 65.

I got this figure using the simplest Roth IRA calculator I could find on the web.

[aron dailey]

I dont have that time to wait i need to know the fastest and simpliest way to turn 1dollar into a million dollars in a year. thank you

[tanyetta]

Ok, I'm definitely LOST now.

:(