“A penny saved is a penny earned…and then some!”
Investing a little $$$ early in life leads to big gains
By guest blogger: Susan K. Maciak – CAMEO Communications & Consulting LLC
Saving pennies in a piggy bank brings back childhood memories that most of us abandoned long ago. Millennials (20-35 year olds) work hard to make money, but very few realize the benefits of saving and investing just a little of their hard earned cash. Their money could multiple — if they let it!
Setting aside just small amounts from each paycheck can lead to great financial gains later in life. As little as $20 or $30 a month could grow into a small fortune over time. If you invest your savings, compound interest, dividends, capital gains and other moneymaking opportunities open to savers put your dollars to work for you.
People can only work a limited number of hours a day.
Their money can work for them 24 hours a day.
The result of saving and investing: More lifetime perks, such as travel, entertainment, or exciting events, improved lifestyles and enough financial security to enjoy worry-free living. People can only work a limited number of hours a day. Their money can work for them 24 hours a day.
“Saving and investing for a brighter future is not taught in school,” regrets Will Ellermets, founder of Battle of the Gains (BOTG), an organization that promotes healthy lifestyles through special events. “We’ve added financial gains to our personal well-being goals to fill in the gap,” he explains.
Pennies turn into dollars; dollars into thousands
“A penny saved is a penny earned,” Benjamin Franklin once wisely observed. The tenth son of a soap maker, Franklin did not find it easy to save money. Yet, he was able to get ahead later in his life by saving enough in his youth to invest in a store and a printing business that led to a good living.
With today’s many investment options (stocks, bonds, mutual funds, money markets, CDs, ETFs, IRAs, real estate, etc.), money not only accumulates, but it also grows. New graduates who decide to invest a penny of each dollar they earn throughout their careers can hope to amass a small fortune. They will also have funds available to cover a crisis, such as a job loss or unexpected illness, put a down payment on a home, or send kids to college.
The key to making a profit on your savings is investing it — a little at a time — for a long time. If young adults save just $1 a day, they’ll have $7 to invest at the end of each week, about $30 at the end of every month. That is no more than the cost of a night or two at the movies with popcorn and pop!
Invest a little at a time for a long time
Saving at home in their piggy banks, each of these young penny-pinchers will accumulate $365 at the end of a year, $3,650 after 10 years and $146,000 after a full 40-year career. If, instead of just hanging onto the money, savvy savers invest in places that pay interest, earn dividends or offer other financial rewards, their fortune could exceed 5 or 10 times as much, maybe more, if they invest wisely.
By saving just $7 a week — the cost of latte and a bagel with cream cheese at a bistro, or the price of a fast food lunch – anyone’s nest egg will grow. Young adults are foolish not to follow Franklin’s advice – save and invest over time. Each dollar invested can lead to big bucks.
Tips for saving part of your paycheck without feeling the pain
- Open a bank account that includes regular savings (checkbook or debit) and a money market savings account.
- Have your paycheck directly deposited into your savings account (or go to the bank to deposit the whole check the old-fashioned way).
- Tell bank clerks to transfer a small amount of each paycheck to your money market savings account where you’ll start earning a little more interest.
- Spend only what is left in your regular savings (checking or debit account).
- Never touch savings that go into your money market account. Let those funds accumulate with interest until you have enough to invest.
ENOUGH TO INVEST depends on where you decide to invest your savings. When you’re ready for your money to start making more money for you, take the following steps:
- Ask your banker or a local financial advisor about options they offer that bring in more in interest, dividends or growth than money market savings are earning for you, or . . .
- Open an online brokerage account at any of the following sites: E-trade.com, Fidelity.com, Charlesschwab.com, Scottrade.com, Vanguard.com. Millennials lean towards newer sites like Robinhood.com or Stockpile.com. Find the online investment mode that works best for you.
- At each investment site you visit, explore requirements for opening accounts and purchasing various kinds of stocks, bonds, mutual funds, ETFs, etc. Most sites list call-in phone numbers or email addresses to answer any questions you may have. Once you choose the right site, start to transfer money gradually from your money market savings account into your investment account. Let it stay there to grow.
Learn as you go. Search online for “investment strategies,” or Google financial blogs to follow, such as Nerd’s Eye View or The Motley Fool. Read investment magazines like Money or Fortune, and listen to CDs or watch videos by money experts. Tune into cable channels CNBC or Bloomberg, or follow the daily news. The more you know, the more your money will grow!
Change your life. Change your community. Change the World.
Battle of the Gains is a movement conceived and launched by Will Ellermets as a student at Grand Valley State University (Allendale, MI). Blog posts are developed by Susan K. Maciak, business associate / advisory board member / owner of CAMEO Career & Corporate Consulting LLC at www.cameo100.com For permission to reprint: firstname.lastname@example.org