Newbie Lesson - What 5 Dollars can do for you
Let's see what $5 dollars can do for you.
The average American person spent a whopping $1,200 on coffee last year. That’s almost $5 dollars per work day that now belongs to Starbucks.
Do you know how much money you can make if you would have invested in the stock markets instead of drinking it? Any guesses?
The average return of the stock market for the last 100 years adjusted for inflation is 8.42%.
Let's see what happens with the following example.
If you invest $5 a day for the next 35 years at the same interest rate.
How much would you have?
An outstanding $381,670
That’s from only $150 invested per month!
Imagine how much you can make if you invest more than $150 a month. (We made the numbers on this post: How much money do I need to start investing )
How is this possible?
Basically, the magic of compound interest is that you earn interest on the interest, making your investment grow bigger and bigger. It´s Exponential
Don't wait too long to start. Starting early can have a significant impact on the size of your savings.
The sooner you start the more you can save for the future.