You’ve heard about underwater homes, but what about underwater lives? Up to your neck and drowning in a pile of financial papers and information, more than any human could possibly process, and crying out for help as the river sweeps you further and further away from the safety of being on the dry ground of financial safety? Once you reach the point where your debt outweighs your assets it’s so easy to say “Why bother? I’m already a goner.”
It’s no secret that most of America is financially struggling. With the country still recovering from the recession and jobs still hard to find in parts of the country, many people are having to take what they can get. Even if it means living a shiny degree in the dust of the attic while you flip burgers to keep the student loans under control. With record numbers of good people having no feasible choice but to take what they can get and shelf the dream job, often the job they went to school for, this underwater lifestyle is becoming the norm and the dreams are staying in the clouds. So what can you do? It’s no secret it would take literally thousands of dollars to dig the average American out of debt and set them back on their feet. But there is a secret. Time and compound interest.
Blah. Sounds boring. It is sometimes. But the important thing is that a little bit of savings and investing over time will have a huge impact on your life. If you, today, start saving $5.00 each week, put it in an investment with 6% interest, (like your company 401K,) and then let compound interest work it’s magic Would it even be worth the effort? That’s skipping one latte or one pack of cigarettes once a week. How much could that tiny savings possibly add up to?
$275.60 in 1 year. $567.74 in 2 years. $877.40 in 3 years. $,205.64 in 4 years. $1,553.58 in 5 years.
$3,632.63 in 10 years.
$6,414.86 in 15 years. $10,138.11 in 20 years. $21,788.44 in 30 years. $42,652.40 in 40 years.
You tell us. Could you do without $5.00 each week? If the answer is yes, what about $10.00? After ten years you’d have $7,265.25. After forty years you’d have $85,304.80. In other words, after forty years your money would be worth over eleven and a half times what it was worth after ten. At only 6% interest! This, my friends, is the magic of compound interest. Imagine, for a moment, where it would be at 8% interest. How about 12%? If it’s too much math to do it your head, (because after all, you are human,) click the link below to the calculator that inspired this post and input the cost and savings you could get, after only saving a few dollars regularly. Hint: Try running the numbers if you invest the money you’ll be saving each month once you complete your Path to Homeownership program. Spoiler alert: There will be a lot of digits.
Other people do it… Why shouldn’t you too? So let’s work together to get your Path to Homeownership program completed, and get you on to having literally thousands of dollars, all from the investments you can make once you have the savings that come with homeownership.
Until next time…
The Counselors at Affordable Home Provider
Disclaimer: We are not a lender. We are not CFPs. We are Certified Affordable Housing Providers, committed to empowering families and individuals through our Path to Homeownership program to enjoy the American dream of homeownership. We are not a credit repair company. We are affiliated with local and national credit repair companies and lenders, who work with us to make the Path to Homeownership program a success so our residents are able to purchase their own homes.