Before getting into the details, I would make this clear that this was not a click-bait. You have to read this to know this!
Disclaimer: I am not a financial advisor, and your decisions are only your decisions that can not be influenced by anyone including me. Read, Read and Read, and decide for yourselves!
The picture above speaks a thousand words alone! I have fallen in love with 1 cent since when I came across this picture. You will be surprised to see the power of compound interest or compound gains.
This is compound interest calculator from Bankrate, it put in some numbers for your calculation here
You start with 0$,
You have 30 years ahead until your retirement,
You assume an average of 20% gain on your investment annually (a big assumption of 20% right? let's see if it's big...),
And you invest $65 every month, like clock-work (it's $5 more than what I said, I know I'm sorry).
$1,018,959
I started with an assumption that you will make gains of 20% on your investment somehow every year, and there is a basis to it. There is little work to it!
Here is who else is doing it and you do not need to sweat for it!
ETF: SPDR S&P 500 (SPY)
In the last 10 years, the SPDR S&P 500 (SPY) ETF obtained a 13.31% compound annual return, with a 13.44% standard deviation. In addition to these gains, it granted Dividends with an average of 2.1% in the last 10 years. This makes the gains 15.45% at an average over the last decade alone!
So, if you just trusted SPY, without worrying about its bad years and red years, and let it make you some money, so
$65/month at the rate of 15% annual average gains with dividends re-invested, over the period of 30 years will only make you $366,064.
So, to cover the gap left by our targets of 20% and SPY's 15%, you will have to triple your monthly investment to a little under $180/month to make a million.
What I would do?
If I had $2 to invest every day, I would bet $1 in SPY ETF and another $1 in some growth ETF like ARKK (or ARKG, ARKF, ARKQ, etc.). This gives me 2 eggs, one stable, guaranteed to bring home money no matter what, another one that is betting on innovation and the future. ARKK's performance has been exceptional so far and is expected to make over 30% at an average but, it is volatile and your buck here is in riskier hands!
The idea of this post is not about being accurate, but it's telling you that
Small and Consistent efforts will make real difference!
Which trading applications I use?
- Robinhood: Create account today and get Free Stocks as a reward after your first small deposit!
- WeBull: Create account today and get 2 Free Stocks as reward after your first small deposit!
- MerrillEdge
- Fidelity
Shoutouts
@crypto.piotr for keeping me in check, and @project.hope for giving me this platform!
Hello @vixmemon
Welcome to Project Hope.
Excellent reading, a very smart way to invest.
Thank you for sharing.
I suggest you check out the information on the Project Hope economy, as well as some posts from @project.hope and you can join our Discord channel https://discord.gg/uWMJTaW.
Have a great day!
Hi @janettyanez I am already in discord and I have gone through the economy. I know about the beneficiary part! hope to see you around.
I am In!
Amazing write-up
Very true, compounding interest is very powerful. I will have to start paying more attention to the compound interest laws and with consistency, I should be able to smile to my bank in a few years to come.
Thanks for this eye opener content @vixmemon
It is an interesting idea and I am applying it but in another way, I am trying to save $ 1 a day of all the profits I receive in Crypto.Until the moment of writing this comment I have accumulated $ 75, which I had never achieved before in my life, and the interesting thing is that I've been able to invest in touches that give me passive income on a weekly basis, and I still have my money safe. So I do believe in this mechanism, which seems to me to be a very intelligent way of ensure old age.
I congratulate you and I hope you remain motivated to achieve your goal, remember that you must always continue to insist consistently, although there are other easier ways to obtain profits I think the safest thing to do is to go for the safest thing and this is the best option for me.
True that you have secured a way to have consistent and assured gains. This is the same as relying on an Interest or a Dividend!
And if you are compounding it, you are in for a full-ride!
It is more rewarding to do something rewarding consistently it is different from not trying at all. Consistency will push us to make even bigger efforts.
Maybe is better to find a fast track!
It totally depends on the risk appetite of oneself.
I always divide my investments in 4 baskets.
First three categories also are divided on sector basis and each basket above has sub-baskets so I am like into 8 baskets!
Thanks for the $2 upvote(s). I will surely keep it invested! @crypto.piotr @project.hope