The past couple of months, I’ve been saving a few dollars here and there for my daughter’s college education. Saving should be a habit and it should never be painful. If saving is painful, chances are you won’t save. So I just go about my daily life and skip some of the daily pleasures. For example, I never hit Starbucks for coffee on the way to the office and instead of going out to lunch, I eat leftovers. The savings isn’t monumental, but over time it adds up. According to Albert Einstein, compound interest is “the greatest mathematical discovery of all time”.

The power of compound interest is simple: save early and let time and interest work for you. If I save $3,000 for my daughter’s college education in the first year and add $3,000 to the account yearly, assuming 6% interest, by the time she’s 18, she should have $98,000.

YR $
1 3,180
2 6,551
3 10,124
4 13,911
5 17,926
6 22,182
7 26,692
8 31,474
9 36,542
10 41,915
11 47,610
12 53,646
13 60,045
14 66,828
15 74,018
16 81,639
17 89,717
18 98,280

To learn more about Colorado’s college savings plan, go to CollegeInvest.org. If you want to skip the fluff, here’s the prospectus. FYI, page 16 has the fund rate of return.

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