• Shane Dillon

The Power of Compound Interest

Updated: Apr 6, 2020


To save you the time of reading the article, I will go ahead tell you the secret of how to do it. All you have to do is invest $100 a month in an S&P 500 Index Fund from the ages of 16 to 64. That’s it! Assuming the stock market’s historical average rate of return is 7% per year.



Starting Value = $0.00

Contribution = $100 per month (equals $1,200 per year)

Historical Market Average Return = 7%

Years = 48 years

Ending Value = $453,599

*computed on a compound interest calculator

That is $56,400 in actual contributions and $397,199 in profit!!! Yes, you are reading that right. By investing $100 a month for 47 years you would have contributed $56,400 and profited $397,199 from the compounding interest of an index fund.

Here is the year to year breakdown to illustrate the power of compounding interest. Notice how fast your money compounds the longer you stay invested.


Here are the annual returns from the S&P 500 for the past 20 years, as you can see the average rate of return over the given time frame is 7.28%, which is very close to the historical average of 7%.

I can hear the complaints all across the country. How can you expect someone to save $100 a month throughout a lifetime?

Are you kidding me? It’s actually easy if you apply yourself and buy what you need, not necessarily what you want. If you discipline yourself early in life to save $100 per month, then later in life, as you earn more money, you can save a lot more per month and possibly save into the millions. The sky is the limit, and the decision is yours!

If you are reading this as a teen, here is a list of possible jobs to get you started in the workforce.

Top JOBS For TEENS - don’t be too proud to work!

  1. Fast food industry

  2. Babysitter

  3. Lawn and garden care

  4. Grocery store

  5. Department store

  6. Hardware store

  7. Coffee barista

  8. Newspaper delivery or printing press

  9. Clean and detail cars

  10. Tutor

  11. Waiter

  12. Taxi or other car delivery services

  13. Delivery food driver by bike or car

  14. Farmworker

  15. House and office cleaning

  16. Camp counselor

  17. Janitor

  18. Concrete factory

  19. Cell phone store

  20. Gym or swimming pool

  21. Movie theatre

  22. Ice skating rink

  23. Museum

  24. Bowling alley

  25. Hotel reception

  26. Catering

  27. DJ or music artist

  28. Music lessons

  29. Umpire sporting events

  30. Nursing Home

I can give advice and motivation all day long, but it is up to you to get out there and make it happen. Be a doer, not a worrier or a follower!!!

May the power of compounding interest be with you!



How much do you think you have to save each month to become a millionaire if you start saving at the age of 16?

Answer: $250

Compound Interest Computation:

Beginning Amount = $0.00

Years = 47

Rate = 7%

Monthly Contribution = $250

Ending Value = $1,096,607

That is $141,000 of your contribution and $955,607 profit!

TALK ABOUT A CHALLENGE! The choice is yours!

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