If he had invested that in something that gave a 4% return (like a US savings bond) he would have ended up with nearly $35,000
If he had invested that in something that gave a 4% return (like a US savings bond) he would have ended up with nearly $35,000
Yup. Sounds very "smart", but it was not that smart. Even earning a measly 4-5% on your cash starts to add up pretty quickly.
My High School math teacher told us that he did this when I was in school back in the 1970s. He said instead of making a car payment every month, he had a bank acount that he made his "car payment" into every month. After about every 5 years, he got himself a new car, with cash.
Ahhh, the magic of compound interest...
The problem with most Americans is they can't save $10 a month, let alone $170. Any saving they get starts to burn a hole in their pocket....