In the prior personal finance tip #97 which was how to save on the little things, we mentioned how to be awarded with Amazon digital credits for delaying delivery and we mentioned buying a monthly car wash plan.

We also covered the value of buying long term products and services rather than single use items which occur multiple times. Lastly, we covered the value of buying products on the basis of consumption needs.

Employing this mindset with all of your spending will watch your dollars add up. So we’d like to propose a challenge to you. Can you save $100 a month?

For most people, the answer is yes and with that comes the ability to invest this money in yourself. You could do this via tax deferred retirement accounts such as 401(k)s, Roth 401(k)s, Roth IRAs, traditional IRAs and 403(b)s and 457 plans.

The other option is to have an individual brokerage account where you can buy fractional shares of stock in well-known companies. For example, your $100 monthly contribution may buy $5 worth of Apple, Nvidia, Microsoft, Tesla and so on.

Many companies offer this including TB Bank, Charles Schwab, Stash and Fidelity where you can also invest money any way that you choose. All you need to do is set up a monthly withdrawal.

Now for simplicity, let’s create a scenario of compound interest: you decide to invest your $100 each month into an S&P 500 fund. A well-known ticker is Vanguard’s VOO. After their expense ratio, it has yielded an annualized return of approximately 9.5% for the last 30 years.

If you invest that $100 per month at that 9.5% interest, you’d have $181K in 30 years and $980K in 48 years - and this is where compound interest takes over. From years 31 through 48 this account would grow an astounding $699K.

To take this further:

For $200 a month: after 30 years, you’d have $362K and reach $1M in year 41
For $300 a month: after 30 years, you’d have $543K and reach $1M in year 37
For $400 a month: after 30 years, you’d have $724K and reach $1M in year 34

So needless to say this is awesome; and all you have to do is make some minor adjustments throughout your budget.

My advice is that you do not want to look back many years from now and say if I just would have eaten out one time less per month, or cut back on streaming subscriptions, bottled water or overspent during the holidays, I could have had all this money.

So take this heart and pass the word because anyone can be a millionaire.

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