How does $5.00 turn into $500,000? Below I'll show you…
But first, did you know $1.00 invested in the Australian stockmarket back in January 1900 would today be worth over $395,000?
Or one share of The Coca-Cola Company in 1919 would today be worth over $5 million! Right now, there's places where $5 wouldn't buy a bottle of Coke.
The point I'm trying to make is that a small sum of money today, could significantly change your life tomorrow.
Here's a personal example.
Every weekday I drink at least one more cup of coffee than I have to.
With a large coffee costing around $5, I'll be paying around $100 per month for the privilege of having a couple of extra visits to the dentist throughout my life.
You hear that sound? It's everyone calculating what my habit will cost me.
Now imagine this. Instead of simply saving the loose change in a bank account or money tin, let's say I reinvested it at a yearly rate equivalent to the Australian stockmarket's annual average return of 12%.
Daily Saving | Year 1 | Year 5 | Year 15 | Year 30 |
$5.00 | $1,206 | $7,632 | $44,763 | $289,749 |
$7.50 | $1,800 | $11,435 | $67,103 | $434,399 |
$10 | $2,400 | $15,247 | $89,471 | $579,198 |
Calculated using the Moneysmart compound interest calculator at 12% interest pa.
As you can see from the table above, a small amount can make a big difference in the long run.
Burnt milk never tasted so good…
However, let's be honest, I'm never going to give up drinking coffee altogether. But, I could save money by making my own or drinking fewer. It's important to remember though, that the rate at which we succeed, is proportionate only to what we're willing to sacrifice.
By now you're probably saying, "That sounds good but I know nothing about share markets."
To get you started I've carefully compiled a list of four growth stocks under $5.00 per share which I've bought, or intend to buy with my savings.
1. Shine Corporate Ltd (ASX: SHJ) is a leading Australian law firm with an expanding presence outside its native state of Queensland. Shares began trading this morning at $2.29.
2. Independence Group NL (ASX: IGO) is a gold, nickel, zinc and copper miner with rapidly growing production. Its shares opened this morning at $4.80.
3. Yellow Brick Road Holdings Ltd (ASX: YBR) is a growing junior wealth management and diversified finance company. It is currently priced at $0.70 per share.
4. FSA Group Ltd (ASX: FSA) is $167 million company which helps individuals and businesses with debt and cash flow management. Its shares trade at just $1.34.
Our best dividend stock for under $5.00 – Free!
Every wondered why the rich get richer? Now you know why. They invest for the future and let their money do the heavy lifting for them. I own three of these stocks and they have rewarded me for my sacrifice.