Hi. It’s me again. The one who keeps telling you to do all this adult stuff like pre-registering to vote and do college stuff. Unfortunately, I have more adult stuff to tell you.
Let’s talk about investing, don’t worry, I took a personal finance class so I’m qualified. Investing is something they never tell you about, but it’s more important then ever to start it right now then later on in life. Let’s do some math ok?
So, a woman, let’s call her Ms. Early, starts investing at age 15. Her savings account has an APY (annual percentage yeild) of 11.25%. She is putting $500 in her savings every year until she is 65.
A man, we can call him Mr. Late, starts investing at 45. His savings account also has an APY of 11.25%. He is putting in $10,000 in his savings every year until he is also 65.
Kind of seems like a no-brainier right? The one who is putting more money in their account has the most money by the time they are 65. Well, you’d be wrong. Very wrong actually. While Mr. Late is putting in $10,000 a year, hes only doing it for 20 years, while Ms. Early would have been putting money in for about 50 years. Does the amount of time they have been saving matter? Actually yes.
APY is the amount of money you earn in interest every year. So with a 11.25% APY, Ms. Early in her first year would have made $56.25 in interest at the end of the year. So now she has $556.25 in her bank. That money plus the $500 she is putting in savings becomes $1,556.25 at the end of the year. Since the amount of money is higher, she earns more interest, about $118.83, making her total for the end of the year $1,175.08. See where I’m getting at here? So by the time Ms. Early is 65, with interest and consistent savings, she will have $1,131,160.64. That is a lot of money dude.
For Mr. Late, while yes he is putting in a lot more money, he has less time for interest to accrue. By the time he is 65, he will have $828,897.31 in his savings, which is a lot, but not as much Ms. Early has at 65.
Do you see the importance of investing early? For Ms. Early and Mr. Late, it’s a difference of $300,000. You could do a lot with that money. So please people, start now. Even if you can only put in $100 a year to start, it’s going to add up, and your future self will definitely thank you.
Welcome to the Venturer Voice Blog!
We look forward to bringing you stories of Venture Teams, Portrait of a Graduate updates, Changemaking news and more. Make sure to stop by often for new updates.
Interested in writing for the official UWYV blog? Our audience wants to hear from YOU!
The Venturer Voice blog seeks students, Champions, Allies and community contributors to write pieces for our official blog! Contact us today!
Hi. It’s me again. The one who keeps telling you to do all this adult stuff like pre-registering to vote and do college stuff. Unfortunately, I have more adult stuff to tell you. Let’s talk about investing, don’t worry, I took a personal finance class so I’m qualified. Investing is something they never tell you […]
If you are over the age of 16 or you just turned 16, you are eligible to pre-register to vote. Okay, so I get it, you plan to do it when you turn 18, no need for super boring adult stuff just now. Go live life, you say, have fun, c’est la vie, whatever. Yeah […]
This year Venture Team, Karate for Kids, from Fitchburg High School awarded a scholarship to Fitchburg High student, Tai Lee! For Karate for Kids, this is their second year awarding scholarships to local students. In 2018, Ethan Chandler, the founder of Karate for Kids, awarded $600 to Me’Yah Newton for her awesome dedication to martial […]
College. Saying the word is making many kids all across the world flinch right now. Even writing out the word college makes me cringe and think of bad SAT scores and essays that seriously need to get written. For myself, an upcoming Senior, college has taken over my mind for months now. It’s unavoidable. The […]
Many Venture Teams this past year made poverty their main problem to help fix. In this day and age, poverty is increasing exponentially, especially in Massachusetts. In 2018, about 10.5% of Massachusetts population was below the poverty line (www.talkpoverty.org). While that is definitely not as bad as it could be, there is still tons of […]
