From Pennies One Million Dollars Grow
Posted in Banking, Finance, Frugality, Investing, Money Management, Savings
by
Penelope Pince
Original artwork by Madoline Hatter available on a variety of merchandise at Mozartini
As we learn in grade school science, everything on this Earth is composed of many smaller things, which in turn are composed of even smaller things, etc., etc., etc. The same principle applies to finance and fortune. I have often read or heard of people who, though they wish to become wealthy, opine that doing certain things or forgoing certain pleasures simply isn’t worth the time, effort or sacrifice to save a few cents or dollars.
What many seem to forget is that a fortune doesn’t consist of just one thing. A million dollars isn’t acquired all at once or not at all. It is most often accrued over time and not without sacrifice or effort. Before we go any further, I would like to state that I am not perfect and that the following is mostly a lesson and reminder for myself, but hopefully also prove helpful to you. In the past few months, I have made many regrettable purchase decisions (recent examples: Pepsi and Cheetos), by giving in to impulse and forgetting the big picture.
Breakdown of a Million Dollars
It is important to remember that one million dollars is composed of many smaller dollars, which consist of yet smaller components – quarters, dimes, nickels and pennies, without which one couldn’t have even a single dollar.
A Few Examples of Big Things Made of Little Things
- A mountain is built of individual grains of dirt.
- An ocean is composed of individual molecules of water.
- You are composed of organs, which are composed of tiny cells, which in turn are composed of tiny organelles and so on, without the existence of which you would not be here reading this scintillating piece of writing (which is composed of 818 individual words, which are composed of 5,093 little characters.)
A Penny a Day
The chart below calculates the amount of dollars 1, 5, 10, 25, 50 and 99 cents can become if one unit of it is saved (or picked up) each day of the year.
Note that this chart does not count:
- Interest or Dividends if invested
- Leap Years
| Amount | Frequency | 1 Yr | 10 yrs | 20 yrs | 30 yrs | 40 yrs | 50 yrs |
| 1¢ | Once a day | $3.65 | $36.50 | $73.00 | $109.50 | $146.00 | $182.50 |
| 5¢ | Once a day | $18.25 | $182.50 | $365.00 | $547.50 | $730.00 | $912.50 |
| 10¢ | Once a day | $36.50 | $365.00 | $730.00 | $1,095 | $1,460 | $1,825 |
| 25¢ | Once a day | $91.25 | $912.50 | $1,825 | $2,737.50 | $3,650.00 | $4,562.50 |
| 50¢ | Once a day | $182.50 | $1,825.00 | $3,650.00 | $5,475.00 | $7,300.00 | $9,125.00 |
| 100¢ ($1) | Once a day | $365.00 | $3,650.00 | $7,300.00 | $10,950 | $14,600 | $18,250 |
How A Few Cents Soon Become A Few Dollars
Now we will look at a couple of examples of how saving a few cents once or twice a week can add up. Replace the examples with things that apply to your own life.
| Amount | Example | Frequency | 1 Yr | 10 yrs | 20 yrs | 30 yrs | 40 yrs | 50 yrs |
| 50¢ | Store brand grocery item | Once a Week | $26 | $260 | $520 | $780 | $1,040 | $1,300 |
| 99¢ | iTunes Music Download | Once a Week | $52 | $520 | $1,040 | $1,560 | $2,080 | $2,600 |
These are just saving once a week. Multiply these numbers by the number to times or items a week you could save this much on and think of the potential.
How a Few Dollars Saved Could Become a Million Dollars
The following chart shows how a few dollars saved during the course of a month and what they can amount to.
| Amount | Example | Frequency | 1 Yr | 10 yrs | 20 yrs | 30 yrs | 40 yrs | 50 yrs |
| $3 | Starbucks Latte | Twice a Week | $312 | $3,120 | $6,240 | $9,360 | $12,480 | $15,600 |
| $10 | Movie | Twice a Month | $240 | $2,400 | $4,800 | $7,200 | $9,600 | $12,000 |
| $35 | Gym Membership | Once a Month | $420 | $4,200 | $8,400 | $12,600 | $16,800 | $21,000 |
| $50 | Cable TV | Once a Month | $600 | $6,000 | $12,000 | $18,000 | $2,400 | $30,000 |
| Total | $1,572 | $15,720 | $31,440 | $47,160 | $62,880 | $78,660 | ||
Remember that interest and dividend rates grow with your balance, so the higher your balance, the more you earn. Now, make a list of the things you could be saving on every month and see how much principle you could be putting into investments to generate extra or passive income.
Picking up Pennies
I once read an article, Is It Worth My Time to Pick Up a Penny?, which stated that it would be a waste of time and money for someone like Bill Gates to stop and pick a $100 dollar bill up off the floor. A commenter on this article said that he never picked up or saved coins, but instead threw them away because it he didn’t think it worth the time or space to save them. It is true that there are times and circumstances where doing something is a waste of time/effort/happiness/etc., but if you aren’t in the middle of a more lucrative task in the 2 seconds it may take you to pick up the coin and maybe the 5 seconds to toss it in a coin jar, what’s the harm in saving the extra money?
So unless you are one of the fortunate few who could make more money in the 2 seconds it would take you to pick up a coin, next time you see a penny, even better a nickel, dime or quarter, laying on the floor, pick it up and put it in a jar to be combined with other pennies and quarters. In time they will become dollars combined with more dollars to eventually become a sum to be reckoned with.
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Did You Enjoy This Post?
September 23rd, 2008 at 12:25 pm
I think your totals are a bit off…
50 cents x 50 years x 365 days is $9,125… not 19,125.
$1 x 365 x 50 = $18,250. Minor issue, but thought I’d point it out.
September 23rd, 2008 at 2:57 pm
Oops, thanks for pointing out those mistakes! I was doing this between 2:00AM – 6:00AM and there was a lot of copying and pasting, and obviously mistyping, involved (I hate the little Windows calculator).
Just occurred to me I could’ve used a spreadsheet, which would’ve been so much easier. [Mental head slap] This is what happens when you’re up blogging when you should be sleeping!
September 28th, 2008 at 4:13 pm
Great post! I pick up every penny I see and think nickles, dimes and quarters are bonuses. Everything then goes into a coin jar and I turn it in when it is full. My thinking is – why pass up free money? No matter the amount.