An Open Letter to Everyone Under Age 30
“There’s an old story about a guy taking a smoke break with his non-smoking colleague. “How long have you been smoking for?” the colleague asks. “Thirty years,” says the smoker. “Thirty years!” marvels the co-worker. “That costs so much money. At a pack a day, you’re spending $1,900 a year. Had you instead invested that money at an 8% return for the last 30 years, you’d have $250,000 in the bank today. That’s enough to buy a Ferrari.”
The smoker looked puzzled. “Do you smoke?” he asked his co-worker. “No.” “So where is your Ferrari?”
When you think about money and saving, stop, look around, and ask yourself: Where are all the Ferraris? …
Less than 60% of Americans are saving anything, and two-thirds of those who are have less than $25,000 salted away, according to ConvergEx. Almost half of Americans couldn’t come up with $2,000 in the next month if they had to, accord to the National Bureau of Economic Research. According to Nielsen Claritas, Americans age 55 to 64 have a median net worth of $180,000 — less than they’ll likely need for health care spending alone during retirement.
How can so many Americans be so poor if accumulating a lot of money over time is as simple as saving a few dollars a day? Because most people don’t take advantage of what you Millennials have in spades: Time. You have time on your side. Decades in front of you to save and invest. It’s the biggest financial asset you own today, and you’re probably not even aware of it. The single best thing you can do for your finances is to realize how valuable it is.”