Novice Investing - The Value of One Dollar

Date: Tuesday 13th 2008f May 2008 06:29:02 PM

The Value of One Dollar - 05/04/2005

By: Hari Wibowo

The hardest thing to do with money...

What is the hardest thing to do with money? For a lot of people, the hardest thing to do is to save it. Don't believe it? Next time, watch where your paycheck goes. Does it go towards buying the latest cellular phone, expensive sushi restaurants, Ann Taylor new clothing line or towards your brokerage account for the purpose of purchasing stock?

The common excuse I got is that ' I don't have enough money', or ' I'll save later. It does not matter if I just save little.' Baloney! You WILL have enough money to save even if you are earning $8/hour. All it takes is a few dollars a day. Yep, you heard it right. Those dollars that you save by not speeding or carpooling with your friends/co-workers is enough.

I still heard whining throughout the background. Well, how about this? ONE dollar a day. Can you put aside that much? You are still skeptical aren't you? Well, let me show you what a dollar a day can do to you.

Here is the deal. You are going to put aside a dollar a day. At the end of the year, you will invest that money in an index fund that has returned 10.5% since world war II. As a comparison, I would also show you if you save different amount of money a day. Here is the result. You ready?

Dollars per day saved	Year
Dollars per day saved	0	1	5	10	25	40	50
One	$ 0	$ 365	$2,250.65	$5,958.47	$38,709.06	$185,146.83	$508,461.93
Two	$ 0	$ 730	$4,501.30	$11,916.94	$77,418.10	$370,293.65	$1,016,923.85
Three	$ 0	$ 1095	$6,751.94	$17,875.41	$116,127.15	$555,440.48	$1,525,385.78
Five	$ 0	$ 1825	$11,253.24	$29,792.36	$193,545.24	$925,734.13	$2,542,309.63
Ten	$ 0	$ 3650	$22,506.48	$59,584.72	$387,090.49	$1,851,468.26	$5,084,619.26

A dollar a day would have grown into half a million dollars after 50 years. I realize that most of us won't live for another 50 years here but hey at least you can give something to your kid when you pass away. How many parents must depend on their children to live when they can't work?

Some of us may not be able to save $10 a day if they are earning $8/ hour. But $1 ? Come on. That is not even 10 minutes of your wage, right there. So, I don't think there is no more excuse for not being able to save $1 a day. Think of it this way. What can one dollar bill buy? Not a lot, I must say. Heck, I sometimes threw quarters and dimes around, not knowing where it is.

You think you can save one dollar a day?

Now that you know what one dollar can give you, let's start saving now. No more excuse. No more whining about how little you make. For those of you who already save, squeezing one more dollar a day won't hurt. It is a painless sacrifice and yet you may get the chance to add $50,000 to $100,000 to your life savings depending how many more years you will live.

END

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