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From Bob Irish, editor, Retirement Insider: Would you be better off if you were given $1 million today, or one penny that doubled every day for 30 days?
You’d be much richer with the penny.
In fact, the difference between the two choices is staggering. After doubling every day, 1 cent on Day 1 turns into over $5 million by Day 30.
Don’t believe me? Take a look…
It’s all about the power of compound interest—something we write about often at PBRG. Albert Einstein called it the eighth wonder of the world. Warren Buffett says it’s one reason he was able to amass such a huge fortune.
If you have a lot of time on your side, it’s a sure way to accumulate a sizable nest egg. But even if you’re in your 60s, compound interest will work for you…
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If you’re a 60-year-old man, you have a life expectancy of 84 years, according to the Social Security Administration. That’s plenty of time.
Even now, in my early 60s, I’m putting away money every month to create a supplemental nest egg.
If you can afford it, consider investing a portion of your monthly Social Security check in a low-cost index fund or PBRG’s Legacy Portfolio. You could also invest in what we call Income for Life—an asset that lets you compound your money at rates 40 to 50 times higher than a savings account, tax-free.
No matter how you do it, find a way to put the power of compounding to work for you. The sooner, the better.