Please enjoy this guest article by Mitchell Bozentka. Thank you Mitchell for your contribution to WEInvested!
Author: Mitchell Bozentka April 3, 2020
What does $100 mean to you? Is it a nice dinner for date night? Is it your over-priced gym membership? Or maybe it’s your monthly Starbucks fix? Let’s see what $100 really means for your bank account.
We’ll assume you’re 25 years old and planning to retire at 65. This gives you 40 years to build a nest egg that’ll support you for the remainder of your life. What if you gave up your monthly Starbucks fix to save that extra $100 for just one month? With the average return of the stock market around 10% per year, how much would your $100 savings be worth when you are 65?
$5,369.
(Source: daveramsey.com)
Yes, your ONE TIME deposit of $100 dollars would be worth more than $5k after 40 years. That’s more than a 5,000% percent return by the time you retire. When we think of our money in these terms, it seems unnecessary to spend that much money on coffee in a month.
If you took it a step further, what if you had the discipline to curb your Starbucks habit for the rest of your life? What would investing $100 a month until you are 65 years old give you when you retire?
$632,405
(Source: daveramsey.com)
Is an overpriced cup of coffee really worth more than over $600k to you?
Buy a Keurig.
Yeah, it’s difficult to see the long-term benefits of saving just $100 a month when we are in line to buy a Caramel Macchiato. But when we think about the future value of money in the long-term is it really worth it?
