Thursday, December 29, 2005

Start Early...End Rich

As I mentioned in a previous post about Investment Gifts, I have a bunch of younger brothers and sisters that I would like to get interested in their finances as early as possible. So, a post by FMF over at Free Money Finance really caught my eye today. It was entitled Start on Your First $1 Million at Age 16 and I really need to get this information drilled into my siblings heads.

These numbers are somewhat staggering and it really makes me wish that I had started investing earlier (why didn't anyone tell me about this when I was 14 and working at McDonalds).

Basically, the original article from MSN Money states that if a 16 year old puts $2000 a year into a Roth IRA for just 4 years they will have the following (assuming 10.7% returns...which I think is a little optimistic, but still...):
  • $9,378 when you are 20
  • $25,917 by the time you are 30
  • $71,625 by the time you are 40
  • $197,943 by the time you are 50
  • $547,037 by the time you are 60
  • And $1,114,423 by the time you are 67
WOW...that is all that I can say. I have never actually read MSN Money, but I like this article so much that they have earned a new reader.


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