In our last +1, we talked about how I’m attempting to make the idea of saving and investing money much cooler than constantly spending money.
Me: “Wouldn’t it be cool to own parts of Amazon (and Whole Foods) and Apple and…?!”
Today we’re going to talk about Part 2 of that series by talking about the Magic of Money Multiplying via the power of Compounding Cash.
As I scratched the beard I just shaved trying to think of the best way to sell the idea that money can grow if you save it rather than spend it, I thought it would be cool to somehow accelerate the speed of compounding interest at a velocity that was fast enough to get Emerson’s attention while also getting him to the point of having $1,000 he can use to invest in his very own Index fund that owns shares in all those companies we discussed in our last +1.
Emerson started with something like $81. I immediately gave him a beautiful $100 bill as we celebrated Benjamin Franklin’s awesomeness and got the pumps primed for our multiplying money.
So… We neatly organized his $181 in a money clip then put it in the closet next to mine in a safe “invisible” spot where it had a good chance to grow. 🤓
I told him that next week his mom would give him $10 and that I’d give him 10% of whatever money he had this time next week.
So… If he SAVED his money rather than SPENT it, we’d help make it grow.
Then I busted out a piece of paper and showed him the quick math on just how fast it would grow.
Obviously the 10% per week is absurd, but it’s pretty exciting (for a 6-year-old!) to hit the $200 threshold and then the $300 threshold in a matter of weeks.
Then, of course, it accelerates even more, hitting the $1,000 threshold in week 14 assuming all the money is saved and “reinvested.”
We’re only in the beginning stages of the experiment, but it’s been fun to play around with these ideas while helping him feel ownership of the money that will be invested in his future either way.
Perhaps the best part?
Since we shifted the focus from spending every dollar he gets to letting it grow, getting/spending money is no longer that big of a deal or even that interesting for him. (Whereas before we started to spend just a little too much time thinking about the next thing he’d buy!)
That’s Today’s +1.
Here’s to finding fun ways to make delayed gratification cool. 😲 😎 😜