I have this little calculator built into my cellular phone. Sometimes, when I’m bored, I’ll pull out the cell and goof around with the calculator. So, the other night I had the following thought, “How much money have I made during my lifetime.” Here are the details. I’m almost 32, and I’ve worked since I was about 14. The breakdown:
These are rather rough estimates (but pretty close). I got my first “real” job in 1996. So, how much money have I made, in salary, over the past 17 years? $379,500. Now, for some folks, that’s not much money, and for others, it’s a lot of money. Whatever you think about the amount (which I consider to be pretty sizable for a dude with no college education who works in a a small, rural town in Georgia) you have to admit that it is a pretty decent chunk of change. This got me to thinking a little bit further. What IF, instead of spending all of my money (as I did every year until the past two) I had actually SAVED 10 percent of my salary, at say 8 percent interest, per year. Let’s run the numbers:
|Ten Percent||End Of Year|
At the end of the 17 year period, I would have had 64,410.58 in my retirement account. Not bad. Instead, I have about 20K. Now, for the sobering reality. Ready? If I NEVER put another dollar into retirement, but left that 64K to grow at 8 percent, how much money would I have in, say, 30 years when I’m ready to retire?
Yep, that’s right. If I had saved just 10 percent of my income for the past 17 years, in 30 years I would have over $640,000 dollars, without ever saving another dime. But, what if I waited just 5 more years to retire, when I will be 67?
Wow! Now, as you can see, I have “low-balled” my estimates. I assumed a VERY modest amount of savings, and a very, very modest rate of return, and I STILL would have almost 1 MILLION dollars in my retirement account. Do you SEE how important time is? If you are a young person and you are reading this, please realize the EXTREME importance of starting NOW. I’m already playing catch-up, and I’m debt free with 20K in the bank. You have to get started. NOW!