Small Cents BIG Change

One of the things that commonly comes up when discussing saving and investing is the argument that you don’t have any extra money to save in order to invest. I understand completely that we have a lot of demands on our wallets these days but I want to assure you that even small amounts of money can grow into big amounts over time. Would you believe me if I told you that you could leave your loved ones a nice sized inheritance by saving and investing your pocket change? Don’t believe me, well check this out.

If you put away one coin from your pocket change today and never added to it, this is how much that coin would be worth in the future at different interest rates:

6%

 $0.01$0.05$0.10$0.25$0.50
10$0.02$0.08$0.17$0.42$0.84
30$0.05$0.27$0.54$1.35$2.71
50$0.17$0.87$1.74$4.34$8.69
75$0.75$3.73$7.46$18.65$37.29
100$3.20$16.00$32.01$80.02$160.05

8%

 $0.01$0.05$0.10$0.25$0.50
10$0.02$0.10$0.20$0.50$1.00
30$0.09$0.47$0.93$2.33$4.66
50$0.43$2.17$4.34$10.86$21.71
75$2.97$14.87$29.74$74.35$148.71
100$20.37$101.84$203.68$509.20$1,018.41

10%

 $0.01$0.05$0.10$0.25$0.50
10$0.02$0.12$0.24$0.59$1.18
30$0.16$0.79$1.59$3.97$7.93
50$1.07$5.34$10.67$26.68$53.36
75$11.56$57.81$115.63$289.07$578.13
100$125.28$626.39$1,252.78$3,131.96$6,263.91

12%

 $0.01$0.05$0.10$0.25$0.50
10$0.03$0.14$0.28$0.69$1.39
30$0.27$1.34$2.67$6.69$13.37
50$2.58$12.90$25.80$64.51$129.02
75$43.87$219.33$438.67$1,096.66$2,193.33
100$745.73$3,728.67$7,457.35$18,643.36$37,286.73

You might consider this exercise silly but I believe it shows two very important lessons. First off, even small amounts of money can become large amounts if given enough time. Secondly, this example shows why you should choose your investments carefully. Doubling you rate of return doesn’t just double your money. Over time compounding will work it’s magic and your returns will be worth much more than double. Take for example the penny used above. At 6% it becomes $3.20 in 100 years but at 12% it becomes $745.73. That is a huge difference.

I understand saving money is a sacrifice but you have to constantly think about the reason for the sacrifice. Remember who the sacrifice will benefit. It will benefit your family, friends, church, charities or any other worthy causes. A recent startup began their business on the idea of investing your spare change, Acorns.

Also, consistent investments make a huge difference. If you take the quarter example at 12% return, it would be worth $60.33 after 30 years instead of $6.69 by simply add a quarter each year.

Start small and keep trying to add more and more over time. You’ll be amazed at how easy saving money can be once it becomes habit.

A good man leaveth an inheritance to his children’s children;
And the wealth of the sinner is laid up for the righteous. Proverbs 13:22 ASV

Leave a Reply

Your email address will not be published. Required fields are marked *