What happens if you invest $10 every day

hey guys

wondered what's gonna happen if you invest ten dollars every single day how much money would you have on your bank account in 20 years and how much of a passive income with that amount of money generate you every single year after you're stopped investing in 20 years if you're interested continue watching this video by the way it's brought to you by the great courses plus [Music] now what is $10 for me for me as a person living in San Francisco $10 means buying a coffee and a cross Sun every day but if I end up going to a fancier coffee shop like Blue Bottle I would even exceed $10 so if I decide to have my coffee at home which I already do and if you get a coffee from Nespresso delivered to your home for me it cost like I think 25 cents a cup and if you try to eliminate gluten from your diet and not get that cross Sun then ten dollars sound like an easy daily saving I know that in some countries in some states ten dollars might be a more significant amount than what it is and here in Silicon Valley in San Francisco but you could start investing as little as five dollars every day because still in 20 years you're gonna be able to generate a significant amount of money I hope I got you excited and before we dig into how much you're gonna make in 20 years I'm gonna explain you what compound interest is now before we proceed I want to talk to you about a thing that is called compound interest and it's a magic thing because Warren Buffett one set that he made all of his money thanks to a being born in America some lucky genes and compound interest the way I prefer to think about compound interest is it's the snowball effect that helps you make interest on interest and this way your money grows at exponential rate let me explain this from mathematical standpoint so years of formula that explains how much you're gonna make an interest in one taken month so you have your principal how much you're having your accounts you have AP white and percent divided by 12 months and this is how much you're gonna be getting every single month as an interest so let's say you already have $1,000 in your account that means you've been investing 10 dollars every single day for a hundred days then multiply that by seven percent divided by 12 months and well seven percent should be zero point zero right and you end up getting five eighty-three dollars a month but what interesting is what happens at the end of the month so these five dollars are added to your principal and you start the next month with a thousand dollars 5.83 but the thing that I'm suggesting you also do is you add extra say three hundred dollars because you've been saving $10 every day and then the end of the month you just put them on your bank account so you are helping compound interest by adding more and more money into the machines so the next month you're already starting with one thousand three hundred five dollars and you have the same formula going on and this snowball effect continues and continues no very soon we're gonna learn how much you're gonna end up having under your account with the help of this compound interest magic are you gonna ask me marina where do I get those rates where do I get seven percent rate where do I get nine percent rate if you're interested in learning more about things that you can invest in there is a great course on the great courses plus by a guy who's a professor at Duke University and he has been teaching there he's graduated from Harvard and he's gonna tell you about every single instrument that you can use to invest in like real estate called 80s stocks everything that's out there is gonna be explained to you by him and I think it's really great to have this reputable source of information when you're learning something as complex as investing and it is a great course is plus a sponsoring this video there's a link below that you can use to get a free trial of their platform and watch this course for free the great courses plus is a subscription on-demand video learning service with top-notch lectures and courses from topper fasters from the Ivy League and other great universities globally through your subscription you get access to a huge library of over 11,000 video lectures about anything that interests you science math history literature and investing so the link is down below click it to get your free trial so first of all the higher the rate is the riskier your investment is and the risky way to save your money is to put them into a savings account but I wouldn't even call that investing because well if you choose a good account like Capital One Marcus by Goldman Sachs or Li Bank which pay you more than 1/10 of percent you will still end up getting 1.5% 1.75 percent maybe 2 percent if you're lucky but I would still advise you to have some money in those savings account because we don't know what's gonna happen tomorrow we don't know what's gonna happen in the week and you know for me it's really important to have these savings that I know I can spend right away if something happens but then unless you have those I would start investing into riskier assets and let's take a quick look so for example S&P 500 the index that has stocks of different companies ranging from oil and gas to media and health care this index fund has been growing at a rate of 9% for the past 15 years now I personally have invested into an index fund with Vanguard it is called V T Sachs and it has been growing at approximately 5 point 79 percent over the past 20 years so my suggestion would be diversifying your $300 a month or $10 a day between those higher yielding index funds and you can invest through Vanguard or any other app that's on the market of course there are other ways to invest with higher and lower rates but this is something I decided that I would invest in because it looks easy and I'm not a professional investor and I just want to put my money there and watch it grow and not really manage my funds every single day I just want to you know add money and add money and relax and do something that I'm better at like making this videos and now let's take a look what's actually gonna happen to your bank account in 20 years if you invest 10 dollars every single day at 7 percent return rate okay here's a quick website saving no dork so for example you save $10 every day for the next 20 years at an investment returns 7% for example you invested in something similar to S&P 500 or BT Saks we've talked about and we press calculate so in 20 years you will have one hundred fifty nine thousand two hundred seventy eight dollars on your bank account now this is already a substantial amount of money but what's more exciting about this amount is that in twenty years you can stop investing you're like okay I'm done saving $10 every day I want to get my Starbucks coffee I want to get my cross Sun but you still have those one hundred fifty nine thousand dollars that you can still invest this is your principal and let's take a quick look so you take those one hundred fifty nine thousand dollars and this is your initial deposit there is zero monthly contribution and say you invest them for a year at a rate of seven percent you see what's gonna happen you're gonna earn interest of eleven thousand dollars that means that those one hundred fifty nine thousand dollars in twenty years they would pass if we make you eleven thousand dollars in a year and this is what everyone calls passive income okay let's look at another situation for example you decided to invest twelve dollars instead of ten because you decided to save on clothes you decided to save on a car whatever this extra $2.00 savings a day let's see what's gonna happen to your bank account so twelve dollars every day for 20 years at 7% rate $191,000 so you have over thirty thousand dollars extra on your account now in 20 years and so for example you decide to invest them again at seven percent thirteen thousand three hundred seventy nine dollars of passive income in twenty years and remember in 20 years you stopped investing I suggest you don't stop but let's imagine you stopped investing you stopped saving money you're just making thirteen thousand dollars a year and you still have your principal you still have your one hundred ninety one thousand dollars in your account sounds amazing right and what you have to do right now first take this effort and try to save at least ten dollars a day and okay if ten dollars is impossible to save we can take a look at five dollars saved every day at seven percent return rate for twenty years it's still seventy nine thousand dollars you know just mentally absorb that five dollars saved every day for 20 years at seven percent interest rate with a compound interest gets you to seventy-nine thousand dollars and second yes you need to learn how to invest money but there is safe kind of safe things to invest in like Vanguard index funds S&P 500 you just need to choose an app or a brokerage that you're gonna work with look at the fees and stuff and you know just start investing I'm not a financial adviser I would just tell you that I'm using bank guard and in the past four weeks I've made around nine hundred dollars just because I invested in a V T Sachs fund the one that I've talked about and then yeah you just need to wait and you just need to be consistent with what you do and hopefully in 20 years we're gonna get you to that eleven thousand or thirteen thousand passive income thank you guys so much for watching this video don't forget to like this video if you enjoyed the content and if you're not yet subscribed to this channel and you're interested in making more money starting in business.