[Successful examples of young people investing with outstanding performance over the past 5 years]

At the end of 2014, a friend once wrote to me "How to teach young people to invest." Mention how he encouraged his daughter to save money and develop long-term investment concepts. Time flies so fast, and now he tells me that the past few years have proven that the correct investment method is effective investment! I believe that if you manage your finances with the concept of long-term investment, you can get rich in the future! The following is the full text of his letter:

My daughter started investing in her investment account. In addition to the fixed monthly deposit of $200 in the first year, from 2014 to today in July 2018, she deposited principal in amounts ranging from $200 to $2,000 each time. In addition to her company's 401K account, depending on how much principal she deposits, I will help her deposit the same amount until she is 30 years old (for example, if she deposits $500, I will help her deposit $500 in the same account).

Today I want to let everyone know that if young people regularly invest a fixed amount in growth funds or stocks, they can achieve financial freedom at the age of 50! Using my daughter's investments as an example, you can see how much total money has increased in her general investment account, IRA, ROTH IRA, and 401K over the years.

The following is my daughter’s investment report for the past five years (this report is based on the investment report of Charles Schwab Report as of 07/23/2018):

Because in the past five years, the funds she invested have not been withdrawn except for switching funds or stocks. If a fund or stock has dividends, the dividends will be purchased into the fund or stock to accumulate shares.

Let’s calculate it. If she uses the current total amount of $96,889, can she retire at the age of 50 in the future?

Funding: $96,889 USD

Annual return on investment: 10%

Total years of investment: 20 years (50 years old)

Monthly investment amount: $1,500

Compound Interest Calculation: Annually

You can refer to this link to see what compound interest is, and you can also calculate the amount of savings that is best for you:

https://www.thecalculatorsite.com/....../compoundinter......

Based on an annual investment return of 10%, the total investment return at the age of 50 after 20 years is calculated to be $1,737,800. This kind of pension should allow her to leave the workplace without worries at the age of 50! If her annual expenses after age 50 are $100,000, she only needs to withdraw 5.755% of the total amount. Please look at the table below again. Her return on investment is very high, but we only use a 10% return rate for our calculations. Therefore, after the age of 50, she will no longer deposit funds. The cumulative amount of investment with $1,737,800 will be $4,507,405 by the time she is 60 years old. At the age of 70... there is no need to calculate the total amount after that!

I hope this experience can help young people understand the importance of managing money early.

Two days ago, my daughter told me that she plans to buy a house in the little Italy community in the center of San Diego before the end of 2019. She moved from Irvine to downtown San Diego in 2014 due to work. If you want to buy a building in the city center, the current price for one bedroom, one living room and one bathroom is about $350,000-$450,000. Two bedrooms, one living room and one bathroom, approximately $500,000-$600,000. Such a huge selling price is really a big challenge for a young girl. But! She said she wanted to write a [house purchase plan] and let us refer to it first and help her fulfill her wish. We'll see if her plan succeeds!

Date written: July 25, 2018