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Personal Finance Education Starts With a Penny

By Edited May 26, 2016 3 6

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If you could take a penny and duplicate the amount by itself on a daily basis, you’d become a millionaire in a month.  Incredible but true.  Let’s see, on the first day I could loan you that penny, in case you’re running short.  I’ll loan it with interest.  On your second day, well, you have two pennies… On the third day, you should have four pennies… Maybe you still don’t see when or how will you become a millionaire in record time…

If you have the time or want to do this exercise, keep adding, or duplicating each penny by itself.  On the tenth day it amounts to $5.12, and by day number 15 its $163.84. It grows to $10,485.76 by day #21.  And by day number 24 you have $83,886.08, which becomes $167,772.16 the very next day… On the 28th day it adds up to the amount of $1,342,177.28… Yes, as read, more than a million dollars.  And if you care to continue by day #30 is more than five million dollars.  Do you see know why I had to loan you that penny with interest?

Personal Finance education is not mentioned nor contemplated within the plans of the Department of Education, as well as it is ignored by the vast majority of private schools and colleges.  The power of saving has been degraded to critical levels.  One of the main reasons the United States economy plummeted was because the average American simply does not save nor invest.

The Social Security Administration already includes in its reports a statement, or disclaimer advising that reported benefits are not guaranteed. They are playing it safe early, in fine print, facing the upcoming probability (probability means there is more than a fifty percent chance it might happen) that, if you were born during the nineties or after, you will not be receiving social security benefits, and if you will, it will be a slim amount.  The Baby Boomers will eat your retirement money, and the Government is not making plans for your financial future, but to balance out its own budget without touching their own private contracts and salaries.

Whereas, saving instruments remain ignored or barely promoted (just like flossing, water, hydrogen peroxide and many others cheap and effective remedies and methods for a frugal and healthy lifestyle).  You do see gigantic neon signs telling you about the millions that you will earn in the lottery this week… And there you go, rushing to get in line to get that ticket because “good luck is for those who play”.  Yet we do not make a line in the bank to put away those five dollars because we find it ridiculous and petty.  We have engrained in our minds that five dollars is not money, regardless of the power of a penny.  The average American does not have respect for money.  And, much like Suze Orman says, “lack of respect for money shows lack of self respect.”  When it comes to spending, we do not take into consideration the effort that it implies earning that money, which in turn is a reflect of how much we value our very selves.

Of course personally I am far from being a millionaire, neither am I able to duplicate any amount on a daily basis for that matter… The issue is to have a budget that will provide both for recurring expenses and for the accumulation of money.  It is insane to spend all earned money without saving anything for the future.  Those that save nothing will have nothing.  The only money that one really earns is the money that one takes home after expenses are paid and promises are met.  Many readers end their month in red because they insist on living a lifestyle that is above their actual or current income.  The race with the Joneses is insanity in the making.  Most real millionaires (not fantastically created but through hard work and discipline) live truly frugal lifestyles well below their means.

The best present a young mom could have for her baby shower is a savings account for her baby.  An account where the legal guardian won’t be allowed to withdraw money until the baby reaches its legal adult age.  And if the mother doesn’t know that her baby has an account, even better.  Takes but people to know they have the possibility of some extra money available to come with emergencies and very justifiable reasons to get rid of capital.  To then end just like before, making the gruesome line to get that lottery ticket, betting on horses or any other new game… and there they stay, betting their savings away.  

I challenge you to put away ten cents of each dollar that you receive for the next three months.  Do it for only three months… twelve weeks.  Savings is a true character-forming habit and is a sure route for financial and mental sanity. It is sad that our education system does not promote or stimulates saving as a first line of attack tool for sound personal finance.  We find it almost ridiculous and unreal to save, yet we are not ashamed to get a consumer (predatory) loan to pay for things we could really do without.  Procure financial education for your children and for yourself.  It is seldom a conversation topic, yet everything we do in life has to do with money.

To sum it up within a Biblical context, it is written that “the root of evil is the love for money”… The love for money is the root for all evil… Money in itself is not the root for all evil, greed is the root of all evil.  Men invented money to make life easier. Merciless ambition would exist with or without it.  Money does not have any emotions or powers in itself besides the ones we render upon it. Money is an instrument of economy, use it wisely.  When we go to the gas station and owe the cashier a penny, we have to pay that penny.  If big corporations look after their pennies, follow their lead and look after yours, they do add up.  Take care of your money and your money will certainly take care of you.

Also Called the Power of Compounding

The Power of a Penny
Credit: earncashandgiftcards.com


Mar 11, 2012 4:27pm
Good article on financial education and responsibility in today's straightened times.
Mar 11, 2012 5:06pm
Thank you very much for taking the time to comment. Pun intended, had to share my two cents!
Mar 23, 2012 5:42pm
This is very good and practical information, CrazyGata!
Apr 6, 2012 8:16pm
Great article CrazyGata! Thanks for those very valuable two cents!
Apr 7, 2012 7:23am
Thank you very much Introspective and BoricuaWriter for stopping by and taking the time to post. This article is sure an example of what it means to earn a penny. :D
Oct 8, 2014 10:25am
Great article. From time to time I write content on retirement planning. Just as your article states, it is amazing how pennies can add up. In my working days, before retiring, I used to keep a lock-box in my desk with a slot cut in the top; not much different than a kids piggy-bank. Every night, before leaving for home I'd empty all my loose change into the box and occasionally add a dollar or two cash into the slot. At the end of the year I'd empty the box and there would always be $300-$400 inside. Holiday shopping cash. :-)
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