At this point in the economic game, any American who actually manages to save some money should be praised, but there’s a right way and a wrong way to do it.
A Pennsylvania man that was not named by The Week Magazine, most likely so he wouldn’t be bombarded with calls from financial planners, recently walked into a bank with 37 4 1/2 gallon buckets filled with pennies he had accumulated over 40 years.
The pennies totaled $10,060. Putting $10K away over 40 years is not extraordinary, but with more Americans not saving anything at all, it’s not too bad.
My problem, however, is that if this guy had started putting the $251.50 he was averaging per year in pennies into an investment that returned even 5% per year, he’d have $20,252 instead of $10,060, even after paying taxes.
Putting these pennies in buckets instead of investing them was a monumental mistake.
“Some people don’t think pennies add up to anything,” this man’s wife was quoted as saying.
I’d love to have seen the look on her proud face when she found out that an annual trip to the bank with these pennies could have doubled their money.
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