Re: Retiring on the lottery

From: "L. Chen" <am302@freenet.buffalo.edu>
Subject: Re: Retiring on the lottery
Date: Tue, 23 Nov 1999 23:40:53 -0500 (EST)

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> ...............
> Are there really ways for a 20 year old with $50 to get 9 percent
> interest?
> ...................
> I have a state retirement plan.  I'm not going to have half a million
> dollars when I retire, but I will have a pension.  It's probably
> statistically true that my best bet for having a half a million dollars in
> the bank is the lottery -- and I don't even buy tickets.
> 
> - -- Nancy Slator, neslator@amherst.edu

Are you talking about $50/month or $50/week?  9% is the total return on
equity investments, not interest on deposits.

$50/month for 45 years @ 9% will give you $370,244 by the time you are 65.
And I suspect you will be able to afford more than $50/month as your income
grow over the years.  So, $500K is not that difficult -- if you start early
and keep at it.

Aslo, don't forget to count your money in your 401 or IRA.  That IS YOUR
retirement money.

It is the POWER OF COMPOUNDING.  And compounding requires TIME IN THE MARKE
(not timing the market) for it to work.  [I borrowed the above expression from
a broker's presentation.]

TIAA-CREF recently started to offer some funds to the public with relative low
expense ratio; and only $250 to open an account.  TIAA and other fund
companies will waive the minimum if you agree to an automatic investment
arrangement.  i.e. you agree to put it $25-50/month until the minimum is
reached.

Many people never start because they don't think they can reach an amount they
have in mind.  But you will never get there if you never start or keep
procastinating.




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