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Please Help: The Advantage to Saving Early

post #1 of 3
Thread Starter 

Does anyone have a good link/source for information on the advantages of compound interest.

 

I *know* I have seen information about how if you saved $x from 18-?  years of age it is the same as saving $y from 25/30- 65 years of age.  Anyone have a good source.

 

DD is now babysitting and we'd like to start her a Roth IRA.  DP & I would actually put forward the money (100% of whatever she earns, which is not much yet) but we would like her to understand why this is an important thing to do.  She understands the concept but I think a visual or an actual example would really help.

 

Also, anyone have a recommendation for a good place for her to get a Roth?  We (DP & I) use Fidelity because that is where his 401(k) is but DD doesn't make enough to have a no-fee account through Fidelity.  It would need to be free even with irregular AND small (even under $1K yearly) contributions.

 

TIA

post #2 of 3

Calculators to put in exactly what she's contribute and how long it has to grow can help. http://www.moneychimp.com/calculator/compound_interest_calculator.htm

post #3 of 3

Just make sure that you use numbers to accurately reflect the type of investment!

http://www.daveramsey.com/tools/investing-calculator/

 

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