Money in One Chart

where money goes

Waiting until $200 a month feels easy might cost you $170,000.

Two hundred dollars a month for thirty years is $72,000 of your money and about $244,000 of final balance. The rest comes from time, and time is the part you cannot buy back.

You asked for the compounding sheet. It is below, as the slides from the post, then the one move, then the tool the chart points at.

Slide 1 of 7: Waiting until $200 a month feels easy might cost you $170,000.Slide 2 of 7: Most of the final balance comes from time, not from the money you put in.Slide 3 of 7: This much of the final balance came from growth, not from your paycheck.Slide 4 of 7: Two hundred dollars a month never feels easy, so people wait for a day that does not arrive.Slide 5 of 7: Seven percent is not guaranteed, and some decades are worse than others.Slide 6 of 7: Three steps to start this month.Slide 7 of 7: Save this for the day you decide to start.

Three steps to start this month.

  1. 01
    Pick an amount you will not notice, even if it is $50.Raise it at the next raise.
  2. 02
    Automate it on payday, into an IRA or the 401k.Not into checking, where it will be spent.
  3. 03
    Do not look at it for a year.The chart only works if you leave it alone.

The tool this chart points at

A low-fee brokerage

For the IRA, the index fund and the rollover. Broad index funds with expense ratios under 0.1%.

Open it

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Sources: Arithmetic; assumption stated on the slide; Difference of the two figures above.

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