Red envelopes of cash traditionally given to Chinese students to ward off evil spirits during the Spring Festival have now found a new purpose. Instead of blowing the money on X-boxes and Haagen Dazs, kids are now saving the money for their education. Evil spirits or not, frugality is the new currency in China.
“The most powerful force in the universe is compound interest.” –Albert Einstein
Okay, I know that a million bucks isn’t much anymore and, with the way the U.S. is printing money, it may not be enough to buy a decent home by the time your kids grow up; but, its not quite pocket change either, is it? You wouldn’t mind having a cool million in checking right now, would you?
Well, I just ran across an interesting article at moneycentral.msn.com , something which I’ve known for years and now wished that I had spent time and, of course, money in following through with on this really excellent idea.
Consider this chart from Ibbotson Associates www.ibbotson.com, an investment consultant of Morningstar (www.morningstar.com), which shows how much would have to be set aside to make your little darling a guaranteed millionaire by the time he/she’s 65. All calculations below are at 8% annual return.
To no one’s surprise, least of all my own, the Wall Street Journal reported today a sudden uptick in popularity in courses on financial planning and money matters. “Fundamentals of Financial Planning” at the University of California.Irvine has 48000 daily viewers and has seen a 27% traffic increase since our most recent Black September. College planning and retirement savings are among the more popular topics. Retirement savings for 20 -year olds? Maybe we’ve turned a corner, though let’s make sure we’re not just going around the block.