What Can A Dollar A Day Get You? And An Inspirational Idea

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Here’s something to get your wheels turning. Let’s say you’re celebrating your eighteenth birthday and you commit yourself to putting just a dollar a day into some sort of investment for the future. Your uncle advises you to use an HSBC savings account to start and a Vanguard 500 mutual fund (assuming historical growth) once you reach the $3,000 minimum entry fee.

On your 30th birthday, you would have $8,210.77 invested. On an average day, your money will earn $2.74 on its own.

On your 40th birthday, you would have $34,919.52 invested. On an average day, your money will earn $12.65 on its own.

On your 50th birthday, you would have $125,235.60 invested. On an average day, your money will earn $41.79 on its own.

On your 60th birthday, you would have $430,828.33 invested. On an average day, your money will earn $143.77 on its own.

On your 65th birthday, you would have $794,815.60 invested. On an average day, your money will earn $265.23 on its own.

If you retire when you are 65 years old and start living off the interest, you’ll bring in $96,808.95 a year.

This is a stellar example of the power of compounding your income and a powerful way to get a young person interested in investing. Here’s what you do: when someone is about to celebrate their eighteenth birthday, print off a sheet of paper that includes the above six lines on it, a line above them saying “If you saved just a dollar a day, starting right now…” and a message congratulating them on their birthday. Include a dollar (or more, if you want) in the envelope.

I’m doing this very thing for my niece’s upcoming sixteenth birthday with only a slight number change. That last one, at age 65? The amount will be $1,015,177.57.

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4 thoughts on “What Can A Dollar A Day Get You? And An Inspirational Idea

  1. The power of compounding has always amazed me; I really wish that someone had truly drilled this into my head when I was a teenager. Maybe then I would have had a fair sized nest egg for when I’m ready to retire (and maybe I would have been able to retire early)

  2. Great post – compounding interest is truly wonderful. I started a bit late with the whole investing thing (not at 18!)… but I am investing more than $1 a day so. :)

  3. This is good, but your numbers will be different if you account for tax and inflation. It would be a good idea to research IRA’s and other tax-free/tax-deferred investment vehicles, and pass that knowledge around (I would put some links, but this is your site not mine, You do the work :-D )

  4. The thing is though, I don’t have a dollar a day to invest. It’s not that I’m not frugal (say hello to the fifteen dollar prom outfit-including a slip, dress,and shoes) it’s just that I don’t have a job (parents) and I don’t have an allowance. I’m off to college soon, and I won’t have a job there (with a full ride and full schedule, I’d sacrifice grades) so I still won’t be able to. I’ve got 2k in the bank, 1.6k in high interest. I’m hoping that donations for graduation and my 18th bday (in lieu of large gifts, my family gives cash to kids with something small they want like a necklace or cd) will offset the lack of a dollar a day.

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