This would have worked for me if I’d started earlier. But, the good news it still can!
Everyone seems to have 20/20 hindsight.
O, to be a teenager again, I would invest more wisely. Lesson learned!
I’d wish someone had taught me how to use the compound interest principle.
Basically, in a nutshell, you put money into a mutual fund account and NEVER touch it!
It draws interest and your money works for you!
Scenario 1:
Let’s start when a person is 19 years old.
They put $2000 per year in the account.
(That is $40 a week. One lawn mowed per week.)
They do that until age 26 (only 8 years) and
just let it draw interest thereafter at 12%.
They retire at age 65 with $2,288,996
(only $16,000 invested).
Scenario 2:
Let’s start when a person is 27 years old.
They put $2000 per year in the account.
They do that until age 65 (39 years)
also 12% interest.
They retire at age 65 with $1,532,166
($78,000 invested).
Difference is $756,830.
(This info is in the Dave Ramsey Financial Peace University Class. )
Here is a link to go to the Dave Ramsey’s Investing Calculator available free for anyone. It also has neat buttons for you to add pizza money, starbuck money and even dining money. The BEST news, it’s not too late to start, just start!
One thing for sure, my children will know and use this before they graduate high school, so if you need your lawn mowed…
Wow, that’s pretty compelling data!
It really is never too late to start cause that little bit more would be more than what you would have had. It is a tough lesson to teach teens, though. I get the same reaction as Jack’s Mommy when I try to explain it to my brother.
Our economy reminds us that we need to be wiser with God’s provisions. Your post is an inspiration. =)
According to Dave Ramsey, 100% of any 10 year rolling period, the stock market has increased in value.
Remember, look long term not short.
My hubby used to have a side job, lawn care business and he took the kids along.
We live in an area that is HOT year round and the grass is mowed weekly or bi-weekly. (I was going on what we have paid or been paid.) Maybe, it depends on what size your yard is as well. Most of my neighbors pay about the same.
We are no where close to Canada. My kids believe snow is something only on TV, not real life. 🙂
Compound interest or not, my investments have dropped 19% in the last two quarters, and by some people’s stories, that’s not so bad! In what part of the U.S. do kids get $40 for mowing a lawn? Is it close to the U.S./Canada border? I might load up my teenagers and head over before the snow flies!
Guess What??? You won the Wednesday Giveaway on my blog!!
Please send me your address and those adorable IKEA napkins will be on their way to you!
Have a fabulous day!
Kristin
Kirby3131[at]gmail.com
Dave Ramsey makes a lot of sense. He is also a great teacher – and so are you! I never saved any money when I was a kid, but I do now – it is never too late. I have been putting money into the stock market this past week – this is the lowest it’s been in a really long time. It is going to come back and if I keep it there for the next 10 years, my money is going to grow grow grow!
Come by my place this week as I’m having a Birthday Giveaway
Kristin
Wow that’s scary! I’m 28…wish we could have saved up even that much money. Depressing that is!
WOW. I was just kicking myself for not saving anything, but even though I’m off to a late start (29) better late than never!
Blessings, Whitney
Does anyone actually pay a kid $40 to mow their lawn?! LOL! (I pay my girlfriend’s 13-year-old sons $5 each when they do it together.)
not quiet a teen myself, but better to start at 28 then 38!
Well, at least it’s not too late for my kids. Hopefully they’ll be smarter about it than I was.
Great tip and advice. I think I might start mowing lawns.
I have 5 boys ~
http://tonsofsons.wordpress.com/
Oh, yes! The miracle of compound interest. Would that we had all been wiser. Here’s to having financially savvy kids, right?
Great Ideals. If only is the though for me. I did my best but you can look back and see what if.
isn’t compounding interest amazing!
great tips! I will talk my husband into putting more aside each month.
Now that’s some math!
Hey, thanks for the comment. I laughed out loud when I read “caboodle”…I forgot all about those things! I think I still have one somewhere 🙂
grrrr…i feel the SAME way. I’m 25 right now, and I kick myself all the time when i think of how much money I wasted as a teen. I didn’t start saving until after I was 21, even though I’d been working since I was 14! I can’t believe how MUCH money flowed through my hands as a teen (before I even had ANY bills) and yet I have nothing to show for it.
I have a 15 year old cousin who i *try* to pound into her head the idea of compounding interest and how she needs to start saving NOW…she acts interested, but, of course, like any other teen, she doesn’t end up listening. I’ve been trying to get her to start saving for 2 years now and will she listen? nope. lol and the bad thing is, I’m one of the closest people in her life – she considers me a “role model” and I helped raise her….yet that’s still not good enough to talk her into saving some of the little bit of money she earns.
She reminds me of ME when i was that age, although i didn’t have anyone around teaching me TO save. 🙂
Wow, amazing numbers. If only we were wise enough as teenagers to listen…