The Magic of Compounding
It looks like 2008 is shaping up as the year Americans are getting serious about saving.
In a survey by the American Institute of Certified Public Accountants With over 330,525 CPA members (in August 2006), the American Institute of Certified Public Accountants (AICPA) is the largest professional organization of Certified Public Accountants (CPAs) in the United States of America. , 25% of U.S. adults said they are spending smarter this year, or not spending as much, to save money -- up from just 2% in 2007. A survey by HSBC HSBC Hongkong and Shanghai Banking Corporation
HSBC Humane Society of Broward County (Florida)
HSBC Humane Society of Bay County (Bay County, Michigan) Direct found that 81% of those who responded want to increase the amount they save in 2008.
What really fires people up, according to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. a study by Wachovia and the Consumer Federation of America The Consumer Federation of America (CFA) is a non-profit organization founded in 1968 to advance the consumer interest through research, education and advocacy.
According to CFA's website, its members are approximately 300 consumer-oriented non-profits, which themselves have , is a graphic illustration of the real secret to successful saving: Thanks to the magic of compound interest, even small amounts of money can grow into big piles of cash over time.
For an eye-opening example, consider two young people, Kevin and Kelsey . At age 20, Kevin begins contributing
Ira (ī`rə), in the Bible.
1 Chief officer of David.
3 Two of David's guard.
IRA. . He continues for ten years and then stops, letting his money sit in the account.
Meanwhile, Kelsey delays saving until age 30, when she starts contributing
Abracadabra abracadabra (ăb'rəkədăb`rə), magical formula used by the Gnostics (see Gnosticism) to invoke the aid of benevolent spirits to ward off disease and affliction. , the answer is Kevin . Even though he stopped contributing after ten years, his retirement fund will grow to
In contrast, Kelsey , who saved
Of course, final totals will differ depending on when you start, how much you contribute and how much you earn. But all other things being equal, the results are always the same: The earliest bird winds up with the fattest worm.
It's easy to capitalize on Cap´i`tal`ize on`
v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the magic of compounding. You can set up an automatic transfer to a bank or investment account or to your company's retirement plan (see Ten Sneaky Saving Strategies).
To jump-start saving among its young customers, Wachovia has introduced its Way2Save account. Set up a Wachovia checking account and you can automatically transfer up to
A deposit account intended for funds that are expected to stay in for the short term. A savings account offers lower returns than the market rates.
Notes: that pays 5% for the first year, and 2% in the second and third years.
Plus, each time you pay a bill online or use your Wachovia check card,
Wachovia estimates the average customer should accumulate