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Saving $300,000 By Age Eighteen

This article was written by in Saving. 40 comments.


CNN Money is featuring stories from six young Americans, all of whom have managed to save substantial amounts of money as kids. When I was a teenager, saving money was never a priority for me. I understood the concepts, but I was more concerned with other things in my life: my hobbies, activities, school, and friends. I found jobs during my breaks from school, but I didn’t save much of what I earned. I certainly didn’t think of saving up for a large purchase, much less saving for retirement.

The kids featured in the CNN Money article are off to a great start. There’s a 23-year old who has been saving since he was eighteen, and he’s accumulated $25,000 for retirement. A fourteen-year-old has accumulated $10,000 by saving from age eleven. I didn’t have $25,000 in my retirement account until I was 28 or 29.

EighteenOh — there’s also an eighteen-year-old who has been saving since age eleven, Grace Goldoni from Princeton, New Jersey (down the street from me), who through babysitting and “lots of retail work” has saved $300,000. I’m still trying to wrap my head around this one. Perhaps it’s a typo, and she saved $30,000, or perhaps she’s just found lucrative clients and high-paying retail. Assuming eight complete years of saving, she’s managed to put away $37,500 per year, after taxes.

Grace admits that her parents “sometimes… match the amount” she saves, but I still find it difficult to fathom how babysitting and retail — working part-time while attending middle school and high school — can contribute to $300,000 in the bank. Even compound interest wouldn’t have made that much of a difference due to low interest rates the last few years. Perhaps Grace invested some money and got lucky with a stock or two.

CNN added a disclaimer to the article, which I don’t believe was there the first time I read it:

In addition to saving the money she earns or is given as a gift, Grace does side jobs, like tutoring, and sells textbooks and clothing so that she is able to put even more money into her savings.

It seems others may have recognized that Grace’s results are a little out of place when compared to the other featured young adults in the article. I wonder what percentage of the $300,000 is a result of gifts. I’ve sold textbooks, sold clothing, and tutored as well, and I can’t imagine those activities contributed significantly to her savings.

Regardless of how she came up with $300,000 as a teenager, it’s a great start for a life of financial freedom. If she can convince or inspire other teens to save, particularly those who live in an area not nearly as wealthy as Princeton, the details don’t matter.

What could you have done to have saved $300,000 by the age of eighteen? Or, if you had saved $300,000 before becoming an adult, how did you do it?

CNN Money

Published or updated December 5, 2011. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 40 comments… read them below or add one }

avatar Andrea @SoOverDebt

Honestly, I can’t imagine a time in my life when I would have $300K in savings. Obviously my retirement account will get there eventually, but it’s too far away to fathom. Kudos to those kids for thinking ahead – I wish I would have been half that financially savvy at their ages!

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avatar Lorraine

I don’t find that number hard to believe. If you can get a number of jobs and they all total say about $30,000 a year in income and your parents are paying for everything else and matching what you contribute, you can pretty much bank most of your wages as a teen and have $90,000 in three years, then about $300,000 in ten years. Besides retail jobs don’t pay $6 and $7 an hour like they used to when a lot of us were kids. Some of these retail and restaurant jobs pay $9 and $11 an hour now. Then there’s tips for bussers and servers at restaurants. There are some places will only pay $10 an hour if you work early in the morning like McDonald’s. I know because I worked at McDonald’s. There’s “premium pay” for working early in the morning or overnight at some places. It’s hard to save that amount but it’s possible – especially if you’re not into shopping for the latest whatever as a teen.

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avatar Steve

That would mean she started working at age 8.

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avatar Sustainable PF

Call me cynical but I don’t buy it. Perhaps Mommy and Daddy give her a $1000 per month allowance on top of working? Or she baby sits for the uber wealthy and pulls in $500 per hour?

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avatar tbork84 ♦1,867 (Half-Dollar)

I am still looking forward to the day when I have $300K in savings. Great work by these kids to have done such a good job at a young age. If you can learn how to make saving a priority when you are young, it will absolutely make their lives easier in the future.

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avatar Penny

I was always trying to make money as a kid, but I was never successful. I didn’t know anyone with kids who I could baby-sit (I was the youngest one in my neighborhood and had no relatives in the same state), and when I was old enough to work I had to find a job which didn’t require transportation because my parents couldn’t drive me somewhere daily and there wasn’t any public transportation or businesses in walking distance. I worked as a camp counselor in high school, but that only paid about $1200 for the summer. I think opportunity counts for a lot more when you’re young. Even though you’re still affected by opportunity and circumstances as an adult, you have more ability and freedom to overcome it.

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avatar LaTisha @YoungAdultFinances

I remember once thinking back to everything I had made and what I had to show for it. I started working at the age of 15 and I did a little babysitting before then. I could have saved more, especially with no bills but I really wanted to dress nicer than my classmates so I would take my entire check and buy Fubu clothing lol! I saved nothing but I definitely have learned since then to save at least 10% of everything I make.

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avatar Ceecee ♦796 (Dime)

Can’t imagine that this is real. Maybe the gifts are bigger than most of us get! I don’t have that much now and I am “way older” than she is.

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avatar CJ Bowker

I definitely think this is great but there’s one problem…where has Grace saved this money? She’s 18 and going to college most likely no college would even consider her for any financial aid. In fact she is probably going to be personally responsible for every penny of going to college. Unfortunately, things are not always as simple as saving money. As much as people want to think all they have to do is save, which is a huge first step, it is also vitally important where you put that money.

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avatar PKamp3

Yeah, $300,000 is more than most 36 years olds – so she’s way ahead of the game. Even if she makes 3% on it she’s a millionaire by 59 – without contributing another cent (and ignoring tax, haha).

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avatar Krantcents

The only way that would be possible is good investments. For eample, you invested $2-3K in Apple 5-6 years ago.

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avatar Will

It’s a great thing, although the achievement itself needs to be further documented before being turned into an inspirational story. $300,000 is a lot of money! I had to read the actual slide to see if there were any specifics, but no.
I’d love to see a followup story. Especially, what are her parents’ financial background? I mean, it does make a difference.
That doesn’t take away from the fact that her focus on saving deserves praise. She could just as easily be $300,000 in debt!

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avatar Eric

I love reading articles like this. I’m 23 years old too (is that really still considered a kid? LOL), and my latest Roth IRA contribution yesterday just sent me a bit over $26,000 in total retirement funds (that’s including the losses I had from the market :(. I also started when I was 18. I had a job since I was 16 but didn’t learn about retirement until someone gave me a PF book for my high school graduation. I wish I could have started even a bit earlier!

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avatar eric ♦1,549 (Half-Dollar)

Oh forgot to comment on the $300,000 story. I would like to give her the benefit of the doubt (although it screams sensationalism from the writer). If she did save that much, even if her parents had gifted her a lot, it is to her credit that she saved it all.

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avatar Ed Mock

Funny, I read this last night and was thinking exactly the same thing

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avatar Paula

I just don’t see how that’s possible. That’s either a typo, or her parents match her contributions 4-to-1 or 5-to-1. I just don’t see how anyone can earn that much working unskilled jobs part-time.

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avatar jim

I’m assuming MOST of her savings is from gifts.

She says “but when I’m working I’ll try to put in at least $50 a month to my savings account.” Doesn’t sound like she saves much at all from her work. If she worked 7 years 20 hours a week at $8 then thats total income of $56,000. That amount would be pretty high for a teenager and doesn’t even consider taxes or any spending at all.

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avatar Financial Samurai

This is an excellent feat, and it’s awesome she out up a nice glamor shot as well.

I believe she saved this money over 7-8 years on her own. I’ve been sending the message of people having much more than we think for a while now.

It’s just not true about all the negativity the media drones on about. Many people are loaded, one just can’t tell because it’s all about staying hidden.

Sam

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avatar retirebyforty

That is awesome, but I’d like to see how she did it. :)
I’m suspicious about the gift, but I still think it’s great that she already has 300k in the bank. It opens up a lot of options for her.

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avatar Steve Dupree

At that age I am not sure anyone should have much, if any, “retirement savings.” It is the age for setting yourself up for your career. I use that term in the broadest possible sense. It could be money for college, or to start a business, or to live off of for a long time while you’re in the peace corp, or whatever. But unless you are a “trust fund baby” whose parents are going to pay for your school, to lock it up for a retirement decades away, when you have so many opportunity for investing in yourself at that age, seems foolish.

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avatar Steve Dupree

I do agree about the young woman in question. Her savings are an order of magnitude higher than the others in the article. There’s no explanation – be it a super lucky stock pick, a startup business she founded and sold, or something. “Try to put at least $50 a month” times 12 months time 8 years = $5,000.

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avatar Jenna, Adaptu Community Manager

Seems like a stretch. I worked as a life guard in high school part time and brought home a fraction of the cost.

I wonder how much of that $300,000 was declared for tax purposes?

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avatar Brian

I think the point the she saved that much is the important thing, at least to me. Even if my parents had matched everything I earned to where I could have saved that much, I wouldn’t have done it. I pretty much spent everything I earned on gas and girlfriends. Pretty sure that $300k would have flowed through my hands just as quickly. I say good job to her for being so thrifty!

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avatar YFS

The only way I can think of a kid having 300k by eighteen is if the parents contributed 13,000 per year via a gift. So 26k per year since 0 + what ever his retail jobs paid. It’s easy to get 300k

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avatar Well Heeled Blog

I say the parents’ (or grandparents’) matching has a big effect. Or she invested in a stock and that did really well. And of course, she was also thrifty and saved her gains instead of spending it. So like all wealth accumulation – it’s probably a combination: her hard work, her discipline, her background, and luck.

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avatar Barb Friedberg

I question the over focus on money. Isn’t youth time to be hanging out with friends and being irresponsible?

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avatar Maggie@SquarePennies

I agree Barb. And when it comes to working, wouldn’t it be better to be getting prepared for college?

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avatar Tony

Performing a quick calculation using Excel I was able to estimate that the only way to reach $300K in 7 years starting from scratch is by saving $2,500 a month and managing to get a 10% compounded annual return. The S&P has only averaged 1%/year for the last 7 years so at 1% return she would need to save $3,500/month instead.
To me this kind of income is very hard to obtain baby-sitting unless she babysits 5 hours a day everyday and charges $31/hour.

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avatar CNelson

Or, works 1 hour/day and charges $155/hr… In fact, if she turns 2 per day, you can relax the 10%/yr assumption. I know, this is mean to say, and I’ll admit, sexist, since it is consistent with her beautiful appearance. But, how else is this possible? I would LOVE to read more about how she did this. If it’s a typo, it’s a major typo and shows how absolutely innumerate our media is (I recently heard a report refer to the US population as being over 300 billion, with a “b”.)

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avatar Briana @ Prairie EcoThrifter

$300,000? That’s amazing, but also seems a bit inflated. Whatever the case may be, she saved money, and that alone is worth a pat on the back.

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avatar wylerassociate ♦906 (Dime)

I have my doubts as to the validity of saving 300k by the age of 18. I can speak for myself that when I was in my teens there was no way that I could have saved that kind of money because I would have spent it on material goods.

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avatar MrsKensington

She’s attending Loyola Maryland and is apparently a model

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avatar CNelson

That’s totally believable; she is beautiful. I wish the article talked about HOW she earned this money; how much of it was from modeling (if that’s the case), how much from wise investments. She “tries to save $50/month” — with $300k in the bank, why bother? $600/year is nothing.

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avatar Abrian

Great job Grace, but I would say the real heroes of this story are her parents. As a the heads of their family for them to be able to afford to match their daughter’s savings periodically, and re-enforce the discipline that is required for her not to touch her savings and continue to add to it is awesome in it’s self. Not having to tap into that vessel of cash or using any of the money for college tuition, misc. entertainment, vacations, etc shows that they are pretty well off or maintain pretty well. I’m sure there are a lot of contributing factors to this amount which may include: Christmas and birthday cash, allowance, working retail, and other avenues of saving that may be available to her. All the same kudos to the parents and Grace.

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avatar Sean H

Perhaps the girl in question did not apply to the same “rule of 72″ as everyone else does. There will be always be “flukes” like this (although very cool to hear) but I think the best thing we can do around the high school age is to learn the concepts and create the habits. Also, I hope I have a kid who is this smart one day! Thanks.

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avatar Kyle

That has to be a typo, based on this line: “I don’t have a constant amount that I contribute, but when I’m working I’ll try to put in at least $50 a month to my savings account.”

By her own admission, she isn’t saving $2500 per month. Either the real number is $30,000 or she’s received some massive gifts. Still, $30,000 at age 18 is very impressive.

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avatar Isabel

Impressive! I have been putting Christmas money (and later, paychecks) into mutual funds since I was about twelve (am now 21) and they total only about $16k. I’m pretty sure I must have spent much more of it than I saved, though. $300k is definitely hard to fathom, but I can maybe see how she got some big number especially if her parents matched her savings. High school tutors can get $25/hr, babysitting can charge per kid/per hour and I usually get about $100 each time I clean out my closet. So if she works all the time and never spends money, for each hour she tutors someone, she’s actually making $50 ($25 pay +$25 match). Definitely beat my $16/hr office job in HS. Baby sitting/tutoring jobs are often paid in cash so I honestly doubt she paid taxes on that income.

On the downside of child savings… I get NO financial aid for college and I really think it’s due to what I have in savings. My apartmentmates have never worked or saved in their lives and have most/all of their tuition paid for. I’m lucky to have a dad who has worked 20+ yrs without vacation in order to afford uni for all four of his kids, but really…it’s like we’re being punished for being responsible with our income.

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avatar andrea1983 ♦226 (Cent)

My economic situation is not good now,saving money was a priority for me,.I’ll try to save money everyday.

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avatar A.Bundy

money is never a problem when family sticks together. going out on your own is guaranteed to bankrupt you. oh well. you live you learn. on another note, i am having a hard time figuring out why you cant pay your debt in a year or two when you earn that much?

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avatar Betty

Each story i heard about ‘saving” was not somehting i was able to do. As a child, i worked for my measly 50 cents per week allowance that went up to a dollar because that’s what it cost to get into a movie. i was restricted from doing much of anything. When i did work, the family took most of it. There was no way to ave anything. i spent years being frugal, combing books and tryig to do the right thing. I never succeeded at getting ahead. Then the economy took what I did have or saved anyway, before it took my apartment.

You have to start with the right situation

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