Poll: Is the power of compound interest overvalued?
At Money Marketing Interactive London, St James’s Place Investment Director Rob Gardner said: âWe have 11 million children in the UK and only 100,000 have a pension.
âIf you invest Â£ 5 a day from birth, they will have Â£ 35,000 saved in every 10.
“If you then stop saving, the compound interest will pay them Â£ 1million out of 60.”
The comment sparked a bit of debate on Twitter …
Fortunately, pensions, especially those that last for 60 years, tend to be invested in dividend-paying stocks rather than interest-paying bank deposits.
– David Hearne, CFPÂ® (@dontdelay) 23 November 2021
Math works for 50 pence a day => Â£ 100,000 – these are small actions over time that can create extraordinary results #powerofhabitats
– Robert Gardner (@robertjgardner) 23 November 2021
I’m with you on this point @SeanBanksFP. Of course, starting early with tax-free savings can only be beneficial and should be encouraged. But we have to be careful not to overdo the big claims. Â£ 1million today was around Â£ 65,000 50 years ago. Â£ 1million in 50 years will seem a lot smaller.
– Dan Woodruff (@danwoodruff) 23 November 2021
Plus, who gets paid per day? I don’t have daily cash for Â£ 5 a day. I get Â£ 0 29 days a month. I could consider saving Â£ 150 a month maybe.
– Ryan Murphy (@ RyanMur65781547) 23 November 2021
What do you think? Please vote and comment.