Thursday evening, my son and I went to a local restaurant for supper. After eating, my son asked for some chewing gum – you know, the little round gum that you get for a quarter from one of the machines at the front of the store. He’s three, so he wanted gum for our whole family – Mommy, Daddy, Sister, and himself. I had four quarters, so we loaded up on gum and headed home.

When we got home, I opened up a spreadsheet and began playing around with a few scenarios. What if, instead of spending that dollar on gum, I had saved it? And, what if I saved a dollar, every day, for a year? for a decade? for 50 years? Also, what if I save more than a dollar, say, two dollars, or five dollars or even 10 dollars, per day?

Check out this chart I created –

Note, the following numbers represent the total amounts *contributed to savings* (w/ no accounting for interest earned).

1 Day | 1 Month | 1 Year | 10 Years | 50 Years |

$1 | $30 | $360 | $3,600 | $18,000 |

$2 | $60 | $720 | $7,200 | $36,000 |

$3 | $90 | $1,080 | $10,800 | $54,000 |

$4 | $120 | $1,440 | $14,400 | $72,000 |

$5 | $150 | $1,800 | $18,000 | $90,000 |

$6 | $180 | $2,160 | $21,600 | $108,000 |

$7 | $210 | $2,520 | $25,200 | $126,000 |

$8 | $240 | $2,880 | $28,800 | $144,000 |

$9 | $270 | $3,240 | $32,400 | $162,000 |

$10 | $300 | $3,600 | $36,000 | $180,000 |

If I save $1 per day, for 50 years, I’ll have $18,000.

If I save $10 a day, for 50 years, I’ll have $180,000.

But, as I mentioned before, this chart represents *contributions* – and doesn’t calculate *interest earned*.

So, let’s kick it up a notch and do some calculations, assuming a 5% annual return.

Yearly | 10 Years | 20 Years | 30 Years | 40 Years | 50 Years |

$360 | $4,754 | $12,499 | $25,114 | $45,662 | $79,134 |

$720 | $9,509 | $24,998 | $50,228 | $91,325 | $158,267 |

$1,080 | $14,263 | $37,497 | $75,342 | $136,987 | $237,401 |

$1,440 | $19,018 | $49,996 | $100,456 | $182,649 | $316,534 |

$1,800 | $23,772 | $62,495 | $125,569 | $228,312 | $395,668 |

$2,160 | $28,527 | $74,994 | $150,683 | $273,974 | $474,801 |

$2,520 | $33,281 | $87,493 | $175,797 | $319,636 | $553,935 |

$2,880 | $38,036 | $99,991 | $200,911 | $365,299 | $633,068 |

$3,240 | $42,790 | $112,490 | $226,025 | $410,961 | $712,202 |

$3,600 | $47,544 | $124,989 | $251,139 | $456,623 | $791,335 |

If I contribute **$1 per day** ($360 per year) for **50 years**, at 5%, I’ll have more than **$79,000**!

If I contribute **$10 per day** ($3600 per year) for **50 years** at 5%, I’ll have more than **$790,000**!

(Please note, I used a very simplified formula to calculate interest, based on annual contributions. In reality, if you made deposits throughout a calendar year, you would earn even more interest!)

Isn’t that cool? I like to look at charts like these. I am motivated by “what if”.

As a side note, my son will only be 4 once, so I’m still going to buy him the chewing gum! But, I’m also going to pocket some additional savings, so that when the time comes, I can buy my grand-kids a warehouse full!

If you want to get really “pumped” about saving money – checkout what happens if you max our your 401k and Roth IRA contributions.

Please consider subscribing to No Credit Needed via email or rss – and follow me on twitter.com and facebook to keep up with my progress. I’d love to hear from you via social media or here in the comments. Have a blessed day!

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Holy crap!!

If you want to really blow your mind, calculate what you would have if you invested that same $10 in a growth stock mutual fund making the market average of 10-12%.

Are you me? Mythbusters, Car Talk, sports radio talk, getting out of debt…I think I have a twin!!!

So is your son three or four years old?

If you compute the numbers using daily compounding at 5%, your balance would be over $816,000 in 50 years. If you can manage a 10% rate of return, you balance goes to…

$5,382,030!!!!!What a difference 5% makes!

I second the mutual fund idea. Compound interest is an amazing thing.

Also, not to rain on anyone’s parade, but just remember that a quarter million in 50 years isn’t worth the same as a quarter million today – it’s worth *substantially* less due to inflation.

Andrea,

My son turns 4 in January – and the new baby is due in April…

I’ve spent so much time telling folks, “he’ll be 4 when the baby gets here” that sometimes I call him 4, sometimes I call him 3…

🙂

NCN

I don’t have any money. Compound interest of 0 is still 0! I’m still motivated and will try $1/day 🙂

Wish me Luck!

Great post! It really makes you stop and think do I need to purchase this candy bar…

Sometimes it’s hard to think that far into the future. Hard, but necessary!

What about inflation? How much would you end up in 50 years really.

For those asking about inflation –

The purpose of this post was to show how quickly things “add” up, if you keep at it –

In the “real world” – one would have to contribute the equivalent of 1 per day – if you wanted to keep up with inflation…

NCN

You should keep this in mind with the 3 (going to be 4) year old and the newborn. Just think about the $10 per day, in 18 years plus 5% interest is just above $100,000. For what? For COLLEGE, what else? You can use this as a quick and simple (theoretically) method of saving for college.

Wow, so $10 a day for a year is $3,600 not $3,650. When did the length of a year get shortened by 5 days? I bet banks did this just to save money on interest.

well, though a bit unrealistic, considering the fact that in most case it is hard to keep away from your saving account and let them untouch for 50 years,your post is worth to read. At least it give more consideration before we investing somewhere

@bobimmy – I simply used 360 for the sake of simplification…

@pipholic – it’s not really that unrealistic…

my wife and I plan to do this for our newborn…

NCN

That’s amazing!

I’m glad I’m not the only one out there running ‘what if’s on a regular basis. 🙂

Great example for your son!

Thanks!!

– Steven Burda

http://www.linkedin.com/in/burda

My husband thinks I am mad saving $10 a week I know it isn’t a lot but I am the only one working in the house and I only work 25 hours a week. I find that $10.00 per week add’s up at the end of the year with my interest that is paid from a saving’s account. I put in extra where i can and I get maintaince for my son which is just under $40 per month so in effect I save $80 approximatley per month. what am I going to do with the money is my most asked question…my response is just leave it there you never know when you may need it!

Intersting. I did the same calculations… but with 10,000 dollars a year being added and I was comparing percentages. I wanted to see the difference of 1% interest rate. The difference between 4% and 5% is over 610,000. The difference between 6% and 5% is ver 879,000.

So saving isn’t the only difference. If you bank somewhere simply for conveniece, this is something to look at.

OOOOooo that is sooo neat. How much will you have at 100 years? Hello, when you’re ass is 80 years old, you won’t give a shit if you have $80 or $8,000,000

Aard-dude, the only way you will not care how much money you have at 80 is if you have Alzheimer’s. You don’t stop being a human being who needs money at eighty. My grandmother is almost eighty, and it sure would not hurt her feelings to have $80k in the bank considering all the meds she has to be on and the property taxes she has to pay.

where can i find a free download to figure out

what the balance would be if i had 100,000 dollars

to put into a safe fund for 40years,as if i did not

waste my time&money going to college and just put

the same amount in a fund that earned interest

then go to work at a fastfood resturent and not

have worry about my retirement,thank,s

I just want to add a comment what will happen to that same $1 a day if I put it under my mattress and do not allow the gov to tax me on my savings? If you haven’t noticed the quote green backs are not going to be tangible some day all of our money will just be on paper we are almost there now the only people who have real cash are the poor and drug dealers even our casinos are cards no more clink clink clink when we win

That’s why you put it in a ROTH IRA and it’s tax free when you pull it back out.

Great post!

Look, this is the same strategy as buy and hold for the long run in stocks. Over a 50 year period just about any type of investment looks good on paper. Projections don’t meana hill of ………….. Ask the Japanese how much they’ve made on thier money over the past 20 years. They lost in the stock market big time. Next to nothing on their treasuries, and lost huge in real estate. No one can project that far out, because quite frankly what’s 750k going to be worth in 50 years? How will it stack up against inflation? Well not to be a poop but you catch my drift. However you have to save something for a rainy day.

To all the nay-sayers who diss the numbers by reason of inflation / uncertainty and so on. $791,000 buys a lot more than zero. Which, if you don’t get busy socking some away, is what -you- will have to buy your off-brand dog food with.

Saving money is great and it $10 a day sure adds up but honestly, one of my worries if what if I die before I get to spend all that money? I don’t plan to have kids and have no one to leave it to so why would I want to accumulate millions when I’m dead. I want to spend the money while I am still on this earth. That doesn’t mean I want to be in debt of spend foolishly, I just don’t see the point the point of being 80 and having 10 mil in the bank since I will be too old to enjoy it.

one cent doubled a day for 30 days equals over 1 million dollars. it is true.

It’s amazing what the small stuff can add up to!!

This was absolutely inspiring! I will definitely put $10 aside per day!, Thank you so much for sharing. Your graphics made it incredibly clear to see that $1 actually has great value, and that if we were to skip that “daily coffee from whatever coffee shop” and save those $10 instead, we could certainly retire with a smile on our faces and with enough financial peace!

I did a search to find out how much money would represent all the money people put into Medicare and Social Security (SS) and that is how I got to this website. People pay Medicare till they die even if they get SS the government deducts Medicare from SS. I did this because most people do not think how much money the government is stealing from people every year. Imagine if people start saving at 10-12% compound interest for SS and Medicare which is very feasible. Then at age 60 they start drawing monthly payments from the account for retirement and leave the account for Medical Care untouched unless there is a need due to illness. Those monies will never be depleted and when the person dies their family inherits whatever amount is left in the accounts. Now, people do not want for Congress to put 500 billion dollars back for Medicare and that is peanuts if you do the numbers. I have always been of the thinking that SS and Medicare should be privatize and let people save the money for their future. So you know, from the time Linden B. Johnson changed SS from being a non-public fund to a public fund in 1967 presidents have taken more than 5 trillion dollars from SS alone…Now, do the math and see how much money that would generate at a compound interest for 50 years.

There are 365 days in a year

There is nothing like the power of maths to show you the cost of what you are spending (or how much you could be saving & earning). Great inspiration.