Class 03 March 2021

Telling Tales

I am going to share with you guys the power of compounding. Most of us is in the early 20s. We probably have not think about our retirement yet. Lately I have been learning more about investing and discover the power of compound interest. Here's a gif from the balance to explain more about it. 

One compound interest example: Let’s say if you are in the age 20, invested $1,000 today. If you didn’t touch it until you retired at age 70, your money could increase by 32 times. That means that you could end up with around $32,000. (Assuming growth rate of around 7%)

But what if you waited another 10 years. Let say you were 30 years old and invest that $1,000 and leave it be until retirement? In that case, you’d only end up with half as much as above, just $16,000. And if you waited until 40? That’d cut the amount you’d be left with in half again: around $8,000. 

BUT what if you were to invest that $1,000 at age 20 and contribute $83 a month (around $1,000 a year) until retirement?? then by age 70, you’d have $465,000. 

If you did the same but waited to start until 30, you’d end up with about $225,000 and if you were age 40, you’d have about $105,000. 

SO START NOW😀