What Saving $5 per Day Looks Like Compared to Investing $5 per Day

Surprisingly in the year 2017, there are still people roaming this country who still stash money up under their mattresses or in a cookie jar for safe keeping.  I even know of a person who still goes to check cashing places to get access to their cash instead of setting up direct deposits into a checking account.  Even worse, I know of a person right now who refuses to learn how to use an ATM machine to withdraw money.  Seriously, these people exist out in the world still to this very day.

So with that being said, it should probably come as no shock to people like this who probably haven’t the slightest clue as to how investing could work for them and their money versus stuffing money under their mattress.  So here’s a simple & quick example to explain the difference between SAVING $5/day versus INVESTING $5/day.

Most people regardless of income level have the ability to save $5/day.  I don’t care if you make $7.50/hour (the national minimum wage), you can afford to either save or invest $5/day.  If you do earn $7.50 per hour working 8 hours per day, that comes out to be $60/day which then translates into $300/week (assuming you work only 5 days a week).  Out of that $7.50/hour ($60/day), you can afford to set aside $5/day for saving and/or investing.  It can be done.  Most people spend more than $5/day on lunch, Starbucks, cigarettes or just some random bullshit to begin with.  But my point is, this can be done regardless of where you fall on the pay scale.

So here is an example of what SAVING $5/day looks like compared to INVESTING $5/day.

If you SAVE $5/day your liquid assets (cash or items that can be quickly converted into cash) would be:

  • $150/mo (based on 30 days/mo)
  • $1,825/yr (365 days/yr)
  • $18,250 in 10 yrs
  • $36,500 in 20 yrs
  • $54,750 in 30 yrs

If you were to INVEST $5/day into the stock market within a diversified portfolio which earned you about 9% interest per year (based on current market trends), your liquid assets would be as follows:

  • Just under $30,000 in 10 yrs
  • Just over $100,000 in 20 yrs
  • Around $281,000 in 30 yrs
  • Just over $700,000 in 40 yrs

See the difference between stuffing money away in your piggy back vs putting your money into the stock market to make it work & earn money for you?

Some of you are probably terrified with investing due to a lack of knowledge, which is perfectly understandable.  Also understand that I am in no way a stock market guru myself, but regardless of my level of knowledge or your level of knowledge, one thing we both should have in common is the continual pursuit of trying to create multiple streams of income…which can be done by putting your money into the stock market.  Even if you don’t want to mess with the stock market at all for whatever reason, at the bare minimum you should get into the habit of just saving $5/day.  The numbers in the above example representing saving $5/day are 100% guaranteed (minus you being robbed for having multiple shoe boxes filled with cash money hiding in your closets).

But for those you interested in seeing how you can flip $5/day into way more money than what the saving example represents, yet you really don’t know how to enter the stock market…well, luckily for you, I wrote an article about an app you can use to help you do just that.  The app is called Acorns, which you can read more about HERE.  This app has a feature that you can set to where it can withdraw $5/day from your bank account automatically to be invested into the stock market.  For those of you worried about whether or not you can pull your money out, yes you can.  This app is essentially a money market account for the most part.  For those of you worried about if you will lose your money, well, there is always a risk of losing your money in the stock market, but history has shown us for quite a few decades that the stock market is a guaranteed way to make long term money.  Hell, even after the recession of 2008 when everybody was losing their homes & money in their 401k’s….almost 10 years later & most people are doing alright with their investments for the most part.  As far as you losing your money because the company you are brokering with goes out of business, well here’s how that works.  The app Acorns is insured by the US government.  So let’s say the Acorns app goes out of business and you have some money tied up in the app, well, the insuring agency will do one of two things:  they will transfer your money/shares to another brokerage or they will issue you a payout for the amount your shares were valued at at the time the brokerage you were dealing with went out of business.  The insurer insures accounts for up to about $300K I believe (I have to check on that, so don’t quote me).  But regardless, you will get your money unless ole girl’s prediction about an EMP sending us back to the stone ages comes true. πŸ˜•

Anyways, I just wanted to point out the vast difference between simply just saving versus investing.  As you can see, it’s an astronomical difference but regardless of how you choose to implement putting $5/day into your life to work for you somehow…which ever path you pursue, you will have money stashed away.

Your favorite mulatto.
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