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.
Oh — 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?