Ramit Sethi explains a simple change in savings allocation can produce large long-term gains: by redirecting $100/month from a child’s college fund to investing for oneself (shorter time horizon vs child's longer horizon), the example grows from $997,000 to $1.1 million — a $170,000 difference from one “flip of a switch.”
$170,000
$100/month
$997,000 and $1.1 million
Do you understand how important that is? One flip of a switch and you just made $170,000. People will agonize over the price of almond butter for their entire life. And right here, if we just made that one change, you have 170,000 more dollars. Let me just play with something. Okay? I'm not saying you have to do this, but let me just play with a couple things. I'm gonna take the $100 a month you're putting aside for your kids college fund and I'm going to instead invest that free. You? Why? Because your child has a lot more time. You have much less. What would happen there? Instead of having $997,000, you'd have $1.1 million. That's not bad. That's $170,000 just from making one flip of a switch.
