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MATT AND CHUCK The tale of two guys and the power of compounding interest!

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Presentation on theme: "MATT AND CHUCK The tale of two guys and the power of compounding interest!"— Presentation transcript:

1 MATT AND CHUCK The tale of two guys and the power of compounding interest!

2 18 YEARS OLD! Matt and Chuck just finished high school! Matt and Chuck just finished high school! It looks like they are in very good shape because their dad’s are hooking them up! It looks like they are in very good shape because their dad’s are hooking them up! Matt’s dad is giving him $20,000 to put in a savings account Matt’s dad is giving him $20,000 to put in a savings account Chuck’s dad is giving him $20,000 to invest in mutual funds. Chuck’s dad is giving him $20,000 to invest in mutual funds. Matt’s situation is even better! His dad is going to put another $20,000 in EACH and EVERY year until he retires! Matt’s situation is even better! His dad is going to put another $20,000 in EACH and EVERY year until he retires! Who would you rather be? Who would you rather be?

3 10 Year Reunion Matt and Chuck compare notes! Matt’s savings account is now worth $201,723. Chuck’s investment has grown to $51,875. Chuck is still feeling cheated! At least he had fun at the reunion!

4 20 Year Reunion Once again, Matt and Chuck have an opportunity to catch up and compare notes! Once again, Matt and Chuck have an opportunity to catch up and compare notes! Matt’s savings account is now worth a whopping $408,466. Matt’s savings account is now worth a whopping $408,466. Chuck’s investment is now worth $134,550! Chuck’s investment is now worth $134,550! He’s still way behind! He’s still way behind!

5 30 year reunion Wow! It’s been 30 years! How time flies! Wow! It’s been 30 years! How time flies! Matt and Chuck are reunited once again! Matt and Chuck are reunited once again! Although it seemed unnecessary, Matt and Chuck compared notes. Although it seemed unnecessary, Matt and Chuck compared notes. Matt’s savings account is now worth $618,922. Chuck’s initial $20,000 is now worth $348,988. Matt’s savings account is now worth $618,922. Chuck’s initial $20,000 is now worth $348,988. Chuck is still behind! Chuck is still behind!

6 40 Year Reunion? Retirement? Don’t worry, there wasn’t a 40 year reunion! Don’t worry, there wasn’t a 40 year reunion! But when it was time for retirement at the age of 65 Chuck did give Matt a call. But when it was time for retirement at the age of 65 Chuck did give Matt a call. They ended up talking about their graduation gifts. They ended up talking about their graduation gifts. After 47 years what were each of them worth? After 47 years what were each of them worth?

7 Matt? Matt’s savings account is now worth $986,492. Matt’s savings account is now worth $986,492. All of this came out of his father’s pocket, year after year. All of this came out of his father’s pocket, year after year.

8 What about Chuck? His dad gave him the initial $20,000 and never put another penny in the account. His dad gave him the initial $20,000 and never put another penny in the account. What is this investment worth after 47 years? What is this investment worth after 47 years? Chuck’s investment is now worth an amazing $1,763,950! Chuck’s investment is now worth an amazing $1,763,950! WOW! WOW!


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