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I wish I had know when i was younger

December 14th, 2007 at 06:37 am

About the power of compound interest!! I once attended a financial seminar. The question was posed like this. "Lisa saved $2000 a year from age 20 to 30 and then stopped. Susan, however started at age 30 and saved $2000 a year from age 30 to age 65. They both earned the same percentage of interest. Who had the most money at age 65?" Every woman in the group said that Susan had the most money cause she had saved for 35 years.

I was the only woman that knew that Lisa had the most money cause Lisa started saving 10 years earlier than Susan.

Be smart, start saving your money when you are very young!! I started working at age 12, but I used my money to buy clothes, school supplies, candy, etc. I wish I had saved some of that money when I was a young teen.

Start early!! Save early!!

2 Responses to “I wish I had know when i was younger”

  1. Broken Arrow Says:

    Oh yes, I've even shown charts to my friends on this, to try to motivate them to save NOW. It didn't work, but at least they were convinced....

    But yes, I wish I was Lisa too. Now I have to be Susan, but better late than never I guess.

  2. ceejay74 Says:

    I have a naive question: Does compound interest nullify the argument that you should only use money for savings vs. debt if you can get a better interest rate than the interest rate you're paying?

    In other words, should I be throwing every cent I have at my credit card debt, or should I ease up and use some of that money for investing, even if the interest rates I pay are like 8%?

    I have over $60K in consumer debt that I think I can be rid of in 2 years if that's all I do. If I start investing, it will take longer to pay off. I can't tell which is better. I do hate the debt, but I don't want to be emotional about it if it's better to invest.

    BTW, I know all advice given will be opinion only, etc.
    :-)

    thanks!
    CJ

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