You’re probably reading this with the utmost skepticism, right? Let’s go ahead and clear the air now by getting all the suspicion and disbelief out of the way. We’re about to show you how to turn $5 a day into $1.5 million. No scams, schemes or anything else is required. In fact, all that’s required is you. The trick to turn $5 into $1.5 million is to save. That’s right! Putting $5 a day into an untouched bank account can make you a millionaire. All it takes is time—50 years to be exact—and compound interest.
Let’s break it down even further: saving $5 a day means you’ll have saved around $150 a month, which then becomes $1,825 a year. In five years you’ll have saved $9,125; in 10 years you’ll have over $18,000. Now here’s where things really start to get interesting: When you add in certain variables like compound interest, your $1,825 a year begins to skyrocket. Let’s take a compound interest of 9 percent for example. If you start investing $150 a month at a compound interest of 9 percent, in 50 years you’ll have $1.5 million! That means that the average person who starts saving $150 a month at 18 will have over a million and a half by the time they’re 68!
Compound interest helps you to turn a small sum into a fortune. Still skeptical? Take a look at this compound interest calculator and check for yourself.
OK, so maybe you won’t reach $1.5 million anytime soon, but there’s no disputing how saving a little today can equal a lot tomorrow. Even an extra $1,825 a year can make a world of difference. All you need is a little willpower and a lot of patience. Though the benefits are undisputable, people still seem weary. Why?
A lot of people tend to ignore or doubt this advice because they either a.) don’t have the patience to save $5 every day, or b.) don’t think they have $5 to save. Both are reasonable doubts, yet if everyone took a minute to reflect on what and how they spend their money, they’d find that it really is possible! Take a look at a few everyday expenses you make—your morning coffee, your afternoon lunch, even your midday pick-me-up—and reflect on how you can allocate $5 from your day-to-day routine and put that money away instead.
If you need even further encouragement, here are five examples of everyday ways you can save:
- Cut down on how much you spend on gas by either carpooling or taking public transit.
- If you’re a coffee drinker, skip paying for that morning latte by brewing your coffee at home.
- Instead of ordering a drink at a restaurant, order water.
- Instead of losing your pennies, nickels and dimes in the washer, dryer or under the couch, have a household piggy bank to keep all your change.
- If you’re always on the go, skip paying for at least one meal a day by making your food at home.
Though it may not make you a millionaire anytime soon, saving $5 a day is a proven strategy to help you effectively plan for the future. With patience and a little diligence, it can even transform your life. For more money and credit-related advice, visit CreditGUARD’s money management page.