This investment advice article was written by me and published on November 27, 1966. It is just as true today as it was then.
The Power of Saving and the Value of Time
We all like to hear about people on top or on their way to the top. Let me introduce a young man that I met recently who is determined and on his way to his wealth.
Benji T. is 16, in high school, and sometimes supplements his allowance by baby-sitting for friends.
What's different about Benji is that he has made a promise to himself to begin to save his money. And what is significant about that?
It's that Benji has TIME on his side. By beginning when he is young, he has the tremendous advantage of having time to work for him. He has learned early of the power of compounding interest and is ready to take advantage of it.
Benji has promised himself to save at least a dollar a day ($30 a month). If he will invest it in common stocks or anything else that makes an average annual profit of at least 10 percent, it means that his monthly savings, with the tremendous help of compounding interest, will grow to more than $148,000 in 50 years. This is the amazing power of saving a dollar a day.
Many working adults can save a little more than a dollar a day. For example, let's say a young family could save $100 a month. This money will grow to $1,662,700 in 50 years.
Below are two charts. They will show you how much your savings will grow at either 4% or 10% profit compounded quarterly. The top chart shows how much your money will be worth if you save only a dollar a day. The second chart shows how dollars will grow if you save $100 a month.
SAVING A DOLLAR A DAY
Amount of money you will have if:
Years of
Amount
Invested at
Invested at
Saving
Invested
4%
10%
10
$3,600
$4,380
$6,060
20
$7,200
$10,920
$22,350
30
$10,800
$20,700
$66,000
40
$14,400
$35,220
$183,510
50
$18,000
$56,820
$498,810
60
$21,600
$88,710
$1,345,440
SAVING $100 A MONTH
Amount of money you will have if:
Years of
Amount
Invested at
Invested at
Saving
Invested
4%
10%
10
$12,000
$14,600
$20,200
20
$24,000
$36,400
$74,500
30
$36,000
$69,000
$220,300
40
$48,000
$117,400
$611,700
50
$60,000
$189,400
$1,662,700
60
$72,000
$295,700
$4,484,800
Benji is lucky to be among the growing numbers of people who begin a managed financial plan while young. Whatever the age or income, if saving is started now, if the habit is willed and developed, you are on your way to a dependable financial build-up.
Author's Note: If Benji stuck to his plan to save only a dollar a day ($365 a year), after 34 years, he would now have almost $90,000 from that one investment. If anyone else took my advice to save $100 a month, that would now be worth almost $300,000.
