That is how much money you would have in your Bellwether 401(K) if you contribute $1,500 per year (3% of a $50,000 salary which is BW median), work here for 10 years, and let your money sit in the account for 30 years before touching it. Read that again.
Put in $15,000 over 10 years, then sit and watch. This is the magic of compounding. Compounding is how an investment grows year after year when you don’t touch it. Compounding is the real secret to how Warren Buffett became the sixth richest person on the planet.
The secret is patience.
You have to wait a while. In my example above, after 5 years your account will only be worth $50K. Good but not life changing. At 10 years $200K. A real nice chunk of change. But after 20 years it’s $820,000 and at 30 years…almost $1.9 million. Game changer.
In this situation, a person who starts their 401(k) at age 35 and doesn’t withdraw until they are 65 would be able to retire and live off of about $70,000 per year until they are 90 years old. Not a bad retirement for someone who only sacrificed (invested) $15,000 of income from age 35 to 45.
We offer 401(k) plans for two reasons:
1) For YOUR benefit. In 20-30 years I hope some of our employees will look at their accounts and realize how big of a game changer it was for them and their families, allowing them to live comfortably in the later years of your life.
2) For BELLWETHER’S benefit. We want employees to work here for a long time and know if you do you will create financial security for you and your family. Our business runs better with experienced people who trust each other, and that takes time.
I can’t count the number of people who have left here for an extra $1.00 per hour somewhere else. No shame – everyone’s situation is different and I’m not here to tell you how to live your life. But that’s shortsighted. 20 to 30 years from now the guy who pocketed a few extra grand is going to be nowhere compared to the guy who patiently and persistently contributed to their 401(k).
In summary, you want to be a millionaire and retire to the good life some day? Stay at Bellwether. Contribute to your 401(k).
Don’t believe me or want to know the math? Click the link below.