What $1 Invested Today is Worth at 65
When it comes to investing, I want you to think about money in a slightly different way.
Most people think in linear terms. What I mean by that is this: Most people cannot conceptualize the power of compounding.
Look at this:
It is easy to do the math of 8 + 8 + 8 + 8 + 8 + 8 in your head right? It equals 48.
However, it is harder to do 8 × 8 × 8 × 8 × 8 × 8 in your head right? It equals 262,144.
Compounding can be tough to understand, so I want to explain it in a different way. One that may be easier to understand.
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Did you know that if you are 20 years old, every $1 you invest today will be worth $88 when you are 65?
Isn’t that crazy? At a 10% average rate of return, if you are 20, you are essentially saving $88 in the future. So if you can invest $1,000 at 20, you are really investing $88,000. If you can invest $10,000 at 20, you are really investing $880,000.
Now I know what you are saying, “but DI, I am not 20!!!”. Okay look at this:
If you are 25, every $1 is worth $44.
If you are 30, every $1 is worth $23.
Here is the full breakdown by age:
For a 20-year-old, every dollar invested could be $88 by 65 (10% return). At 30, your dollar is worth $23 invested (9% return). By 40, your dollar is still worth $7 by 65 (8% return). [6/11]
— Brian Preston (@moneyguyshow)
Aug 11, 2021
Shoutout to The Money Guy Show for this math, but I want you to think of money this way.
Look at your age & look at what the value of $1 is worth when you are 65. If you are young, your $1 is worth a ton more. So, instead of thinking “oh, what is $1 invested at 30 really even worth”? Think of it like this: “at 30, every $1 is really $23. So if I can invest $10,000 this year, I am really investing $230,000”.
Compounding is powerful, compounding is strong. But you must give it time. The best way to give it time is to start now.
If you want to learn how to make $100s or even $1,000s every week selling options, 5 people can get my $50 video course for just $35 (or 30% off). My guarantee is if you do not make $35 back in 1 month following my lessons, I will refund you. (Discount code already applied): https://decadeinvestor.gumroad.com/l/rauxb/newsletter
My Buys This Week:
ETFs: $250 in VOO +
(x)Tweet of the Week:
Warren Buffett is the man & we can all learn something from him! Read a thread I posted on him this week:
Warren Buffett started investing with $114.
He is now worth over $117,100,000,000.
His 12 best tips on becoming rich🧵:
— Decade Investor💸 (@DecadeInvestor)
Aug 24, 2023
Thank you so much for reading & I will see you next week! Until then, keep buying assets & stacking those dividends. 🙂
- Decade Investor S