96 • MARTIN H. RUBY
Maybe you’re like my daughter, who was saving in a 401(k) be- cause, well, it’s what her company offered. You put money away but never really think about it. You just know it’s the “right” thing to do. All of this is to say: When something better comes along, it’s hard to make a change. Saving for retirement isn’t top of mind on a daily basis. You’ll get around to making sure you’re saving right later. Soon. When you find time. Here’s the danger with this mindset: it costs you real, signifi- cant income in retirement. Once you get to retirement, you can’t go back and change the way you’ve been saving all these years. You have to make the decision to save — and save the right way — to- day. Want to see why it matters? Here’s a Penny I’m giving you a penny. It’s not much — just a single penny. But let’s say that penny doubles every day for a month. On Day Two, your penny is now two pennies. On Day Three, your penny is now four pennies. At the end of one month, how much money do you think you’d have? $20? $100? Think again. As incredible as it may seem, at the end of thirty days, you, with your penny doubling every day, you will have more than $10 million — all from a single penny. That is the power of compound interest. Encyclopedias attribute the following quote to Albert Einstein: “Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.” Compound inter- est is a powerful force in shaping our financial future. The sooner you start saving the right way, the sooner you can put compound- ing to work for you.
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