When I was a child, my grandfather used to tell me, “If you save one nickel a day, every day – by the time you are grown up – you will be rich!” I did not take my grandfather seriously. But, what if I had? What would have been the result of saving one nickel a day?

*If a nickel is saved every day from the day a child is born, can a person become wealthy?*

Let’s experiment with this idea, and assume a person has saved a nickel a day for eighty years and used various investment strategies. To begin find an investment calculator, you might try one like http://www.calculator.net or http://www.bankrate.com/calculators/savings/simple-savings-calculator.aspx

- If a nickel was deposited every day for the first year of a child’s life in a piggy bank, at the end of the first year the total saved would be: .05 per day for 365 days = $18.25

- Assume the savings will continue in this manner for 20 years, but in a bank account. At the end of twenty years using a 6% monthly return the amount saved would be
**$753.47**.

__First investment strategy__: $18.25 (year 1) with a subsequent annual contribution of $18.25 for twenty years = $753.47

- Saving a nickel a day for twenty years produced $753.47, not a truly significant amount. But, what if a person decided to take this money and develop another saving’s strategy?

Let’s assume the child, now a young adult, takes the lump sum of $753.47 (instead of buying clothes or video games) and decides to stick with the discipline of saving a minimum daily amount. Let’s say the person decides they can afford a dollar a day and they successfully contribute $30 a month for 20 years.

__Second investment strategy__: $753.47 with an additional monthly contribution of $30.00 and average 6% monthly return for 20 years = **$16,355.37**

- Let’s assume the person, who is now 40 years old, and has never withdrawn money from this fund, decides to double the monthly contribution and invest $60 per month.

__Third investment strategy__: $16,355.37** **with an additional monthly contribution of $60.00 and an average 6% monthly return for 20 years = **$81,862.07**

- Now at age 60, this person may decide to invest the lump sum again, they may decide to go on a great vacation, they may decide to…who knows. But the point is those nickels….can pay off, even with a small monthly contribution as the years go by. Of course, more than nickels were invested once the person turned 20.

- Let’s see what could happen if this person decided to invest the $81,862.07 for another 20 years, but because they have decided to retire, they also decide to decrease the $60 monthly contribution back to $30.

*Fourth investment strategy*: with a new$81,862.07 monthly contribution of $30 and an average 6% return for 20 years = **$284,841.42**

At age 80 this person still has options like, enjoying additional cash flow in the monthly budget or going on a great vacation.

Of course, I have made assumptions in these calculations and the scenario, but the point is clear. Saving nickles on a daily basis -those small things – *can* contribute to one’s overall wealth.