The Value of Saving $1 A Day

Sometimes it seems rather difficult to save money to invest for the future. Saving $1 a day can make a difference in the long run. Let's demonstrate by doing a simple mathematical exercise. Obviously, no investment gives the same return each year, this is a mathematical exercise to illustrate a point.

You save $1 a day or $365 in a year and invested it something that gave a 9% return each year to make the calculation easy. Let's look at this at 10, 20, 30, and 40 years.

How much did you save:

• 10 years = $3,650
• 20 years = $7,300
• 30 years = $10,950
• 40 years = $14,600

At the end of each year you invested the $365 and got a 9% return the value of the account would be:

• 10 years = $5,545
• 20 years = $18,673
• 30 years = $49,752
• 40 years = $123,327

If we take the account balance and subtract the amount of money that was put into the account we can determine the increase due to our investment. The growth from the investment would be:

• 10 years = $1,895
• 20 years = $11,373
• 30 years = $38,802
• 40 years = $108,727

What happens is that with time the growth of the investment becomes more than what was invested. The money grew in an exponential fashion.

Letting investments grow with time gives wonderful results.