Become a Millionaire in 50 years with just £5 a day!

I stumbled across this video the other day, and it got me thinking. This guy, Ryan Scribner takes the principal of compound interest, and shows us that its simple, to “invest” our way to become a millionaire, not simply “save” our way… but invest our way. Without too much stress either. Simple.

Ok, you may be thinking, 50 years is a very very long time…
Fine, agreed, but then again with life expectancy being pushed back everyday, and minimum wages having just increased, well, this 50 years’ time frame doesn’t look too wide after all, and £5 a day, well, that’s kind of manageable for most people. It’s the price of a soya latte and a piece of gluten free chocolate brownie.

So where’s the magic? Here it is, low and behold: COMPOUND INTEREST!

“Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest. It is the result of reinvesting interest, rather than paying it out, so that interest in the next period is then earned on the principal sum plus previously-accumulated interest. “ – Wikipedia definition.

By investing £5 per day, which is £150 per month, over 50 years, with an average interest rate of 8%, ladies and gentlemen, you have just become, officially, legally, and in a pretty relaxed and easy manner a top hatted, eye piece wearing, cigar smoking millionaire. Well done! And you started with only £5!!

Hang on a minute you might be asking, where am I going to find an investment which guarantees 8% interest in this day and age? Definitely NOT through high-street bank ISAs!! Let’s face it, the price of living is going up, everything costs more, but the banks interest rates are stagnant! And will continue to be so for a while it seems.

But have no fear, we don’t have to look to far. The young video maker on YouTube, (subscribe to his channel for more useful videos) simply suggests, to invest your money equally between blue chip companies’ stocks, which are those big well established companies which are more or less secure, and which have provided according to him, 10% average returns per year, over the last 100 years. GREAT! And the other part of your £5 a day, the other £2.50 if you will, he suggests to invest in low risk investment grade bonds, such as government guilts and bonds. This 50/50 portfolio has provided on average 8% interest per year and it seems to be continuing. Why don’t they teach us these things in school?

Read more about it, ask your financial advisor, if you don’t have one, now is a good time to find one! Do some research, I have and I’ve found that this is definitely a simple and easy way, to become a millionaire. This article could “interest” parents or grandparents which are thinking to invest some money for their children. Young professionals who have already a good amount of savings, or the average teenager who’s just started working part time and is starting to learn personal finance skills. Its never to late to start, its never to early to think about the finish line!!

Watch more of Ryans and follow his journey here http://www.ryanoscribner.com/

G.C.
@gianx69
Deal, Kent
2017