As you know, yesterday I set myself the task of starting my Cappuccino Factor Investment to create a long term nest egg..... It took me half the day but I didid it. YAAAAYYY!!!
My plan is to stop paying £80pcm into a pension plan, which I started 27 years ago (in my early 20s). I realised some time ago that there was no point in continuing to throw good money after bad.
To illustrate the point to myself I used an online compound interest calculator. I wanted to see how much better off I would have been if I had been putting the same £80 per month into the Cappuccino Factor over the same 27year period. I've been conservative and used a 10% annual increase, which is entirely possible with this strategy... the interest and regular payments accumulated over into the each year.
The current balance in my pension plan is £27,331.46. If I had just been putting the money under my bed it would have accumulated to £25,920.... so, what could it have been if I had put the same money into the Cappuccino Factor??...... wait for it.... be prepared to gasp..... it would have grown to..... £132,753.33!!!!!!!
If I'd had that money now I could have paid off most of my personal mortgage .. I feel like asking Friends Life where their friend has put my money, but I think I wouldn't get the answer I want!
Anyway, if you want to check out how compounding will effect your money here is the link for the calculator I used.
https://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php
Strangely, just as I was writing this, my 83 year old Dad called to wish me happy Easter... I mentioned what I had been doing and he said he had exactly the same experience with his Friends Life policy... that's two houses we could have got! Thankfully this did not stop him from taking early retirement from his job at the civil service on a full final salary pension at 58 years old - phew! But you can see how many people could be completely scuppered if they don't start taking action and NOW!
Are you like me and still procrastinating over using the magic of compounding to set up your nest egg? If you are then please get going now! To help, next week I'm going to do a top up video to add to Pam's because I had a really nice short cut experience that I would like to share with you.
Until then have a fabulous Easter/Passover/Bank Holiday weekend!
Tx
