This life post is a topic I have wanted to tackle for some time: Being smart with money.
I don’t know why it isn’t a more common practice to teach bright young people like you how to make informed choices with money.
I certainly didn’t make those choices. And artists often lead lives that are unpredictable financially. (I am sure you’ve heard.)
I recently stumbled on an article that compared the investments of two young friends . It says they “took advantage of compound interest. It may sound like an intimidating term, but it really isn’t once you know what it means. Here’s a little secret: compound interest is a millionaire’s best friend. It’s really free money. Seriously. But don’t take our word for it. Just check out this story of Ben and Arthur to understand the power of compound interest. Ben and Arthur were friends who grew up together. They both knew that they needed to start thinking about the future.”
Ben started saving at 19, Arthur at 27, both at an interest rate of 12%. The comparison was astonishing:
Ben, who started at 19, invested $16,000:
($2,000 every year for 8 years)
Arthur, who started at 27, invested $78,000:
($2,000 every year until age 65)
Guess who had more money when they were 65?
BEN! His funds had increased to $2,288,996. Arthur, who started 8 years later and invested $62,000 more than his friend came out with $1,532,116.
Food for thought?
I hope so.
There are lots of great services out there for saving money. I like Betterment a lot.
Do some research. It will pay off. Literally.
Here is Bankrate’s newest comparison article, “Best Money Market Accounts and Rates”
They wrote this to me in an email: “We recently published this comprehensive comparison by surveying 4,800 banks and credit unions across the country to give people the ability to make the best decision on where to put their money. We created this resource to help readers select the best money market account for them, including those that not only have the highest yield but also give them the flexibility of access, while also having low introductory rates and minimum balances.”