Can Compounding Interest Turn $35 into $523,738 at Retirement?

The short answer is that it can be done. Now, how do you do it? Time, patience, and discipline. Not what you were looking for, I'm sure.

I heard on the radio not long ago that only one third of working Americans have any type of retirement program in place outside Social Security. These savings plans included in the study were regular savings accounts at banks or credit unions, mutual funds linked to an IRA, participation in a 401(k) program at work, pension plans, and a Mason jar buried in the back yard. Okay, so maybe not the Mason jar, but the study included many popular options.

Given that Social Security is fast becoming a fairy tale, why aren't more people putting something away for their golden years? You can come up with your own reasons, but one glaring one is that they don't understand the power of compounding interest.

That is how you can turn $35 into $523,738.

If you invest $35 each week, or $150 per month, for 40 years at a modest 8% interest, you will have half a million dollars waiting for you at the end of your working years. That is not a bad exchange.

Think about it... What do you spend $35 on each week without thinking about it? There's a fast food lunch three days out of five, a $4 cup of coffee and a $3 muffin on the way to work, lottery tickets, cigarettes, name brands instead of store brands at the grocery store, failing to combine trips in the car to save gas, cable tv with 500 useless channels, cell phones with 23rd century features that you don't ever use, late fees on video rentals, ATM fees, overdraft/NSF fees, expensive designer clothes, drycleaning, for the ladies - just one more pair of shoes, for the men - one more must-have tool for the toolbox.

Your list of possibles can be a mile long. Take a moment to think about it. Then, think about what you could do with $523,783. If you spend the $35 weekly, in 40 years you will have spent $72,800.

Which would you rather have - $72,800 with nothing to show for it or $523,783 with a world of possibilities at your fingertips? You decide.