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How much money would you have?
Let's play a little game called "what if."

Let's say we have done everything taught here on Eclecticsite.com's Financial Page and have become debt free!

We have worked very hard for several years to get all of our debt paid off and now we have no payments at all.  What if we invested all of those payments?  How much money would we have?  



To see what would happen, let's assume we're investing our money in a good Growth Stock Mutual Fund.  Historically, these funds have returned an average yield of 10% to 12% per year if left in the fund for 5 to 10 years.  Let's split the difference and use an annual return of 11%.

The monthly payment amounts I used here are derived from national averages.  Calculations do not figure in taxes.


How much you would have if you could invest your monthly payments?
Payment typePayment AmountIn five yearsIn ten yearsIn fifteen yearsIn twenty years
Student loan$262$20,833.74$56,853.51$119,128.67$226,797.17
Credit cards$360$28,626.51$78,119.33$163,688.25$311,629.69
Car payment$378$30,057.83$82,025.30$171,872.66$327,211.18
Mortgage payment$1,000$79,518.08$216,998.14$454,689.57$865,638.04
Totals (What you would have)$2,000$159,036.16$433,996.28$909,379.15$1,731,276.08


Wow,

By becoming debt free and investing what used to be our payments, we would have over $159,000 in just five years!

In twenty years we would have over 1.7 million dollars!!!  Even after adjusting for taxes, you would still have over 1.3 million dollars!

If you think an 11% return seems too high, then consider this:  if you got only an 8% return you would still have over 1.1 million dollars in twenty years!
Let's drop that return to a bank Certificate Of  Deposit rate of 2% and in twenty years you still have over $589,500 !

Just look at the numbers in that chart!  Can you see how powerful the concept of becoming debt free is?  Look how quickly you can become wealthy when you don't have any debt payments!

Even if all you had to invest was that smallest amount of $262 per month, in my example, you would still have over $20,000 in just five years and you would be approaching a quarter million dollars in twenty years!

Want to make this happen for yourself?  Then read all of the articles on the Financial Page starting with The Secret To Becoming Wealthy.  If you would like to run some "what if" calculations for yourself, or see how inflation and taxes affect the calculations, then check out the free financial software.




Please know that all of the thoughts, information, suggestions and techniques given on this site are nothing more than the author's opinion on the matter being addressed.  Do further research before making any decisions.

This article copyright 2007 by Keith C. Rawlinson (Eclecticsite.com).  All rights reserved.

This article may be copied for non-profit use including newsletters, bulletins, etc. as long as you
first get written permission from the author and 
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