Quick summary of what's possible with an ordinary bank account. Taking urist's 4k per month, but going with the best interest rate I can find on a fixed deposit (thanks

Africa Bank). They offer 10.75 pa on 60 months, but lets round that down to make it wasy with whole numbers.

So 4k per month at 10% pa, paid monthly (nominal rate). Last column is total interest accrued.

Year | Per month | Saved | Balance | Interest accr | Notes |

1 | 4,000 | 48,000 | 50,562 | 2,562 | |

2 | 4,000 | 96,000 | 106,180 | 10,180 | |

3 | 4,000 | 144,000 | 167,360 | 23,360 | |

4 | 4,000 | 192,000 | 234,658 | 42,658 | |

5 | 4,000 | 240,000 | 308,686 | 68,686 | |

6 | 4,000 | 288,000 | 390,177 | 102,117 | |

7 | 4,000 | 336,000 | 479,691 | 143,691 | |

8 | 4,000 | 384,000 | 578,223 | 194,223 | |

9 | 4,000 | 432,000 | 686,607 | 254,607 | |

10 | 4,000 | 480,000 | 805,830 | 325,830 | |

11 | 4,000 | 528,000 | 936,975 | 408,975 | |

12 | 4,000 | 576,000 | **1,081,235** | 505,235 | First million! |

13 | 4,000 | 624,000 | 1,239,920 | 615,920 | |

14 | 4,000 | 672,000 | 1,414,475 | **742,475** | Doubled your money! |

15 | 4,000 | 720,000 | 1,606,484 | 886,484 | |

16 | 4,000 | 768,000 | 1,817,695 | 1,049,695 | 1st mil in interest |

17 | 4,000 | 816,000 | **2,050,027** | 1,234,027 | Second million! |

18 | 4,000 | 864,000 | 2,305,592 | 1,441,592 | |

19 | 4,000 | 912,000 | 2,586,713 | 1,674,713 | |

20 | 4,000 | 960,000 | 2,895,946 | 1,935,946 | |

21 | 4,000 | 1,008,000 | **3,236,103** | **2,228,103** | 3rd million
2nd mil in interest |

22 | 4,000 | 1,056,000 | 3,610,276 | 2,554,276 | |

23 | 4,000 | 1,104,000 | **4,021,866** | 2,917,866 | 4th million |

24 | 4,000 | 1,152,000 | 4,474,614 | **3,322,614** | 3rd mil in interest |

25 | 4,000 | 1,200,000 | 4,972,638 | 3,772,638 | |

26 | 4,000 | 1,248,000 | **5,520,464** | **4,272,464** | 5th million
4th mil in interest |

27 | 4,000 | 1,296,000 | **6,123,073** | 4,827,073 | 6th million |

28 | 4,000 | 1,344,000 | 6,785,942 | 5,441,942 | 5th mil in interest |

29 | 4,000 | 1,392,000 | **7,515,098** | **6,123,098** | 7th million
6th mil in interest |

30 | 4,000 | 1,440,000 | **8,317,170** | 6,877,170 | 8th million |

The point of this is compounding. 10% interest might not sound like much when you're looking at R4000 over a year. But if you put that R4000 away consistently year after year, it starts adding up, and pretty soon the bank is throwing money at you.

The first million took 139 months

The 2nd million took 64 months

The 3rd million took 42 months

The 4th million took 23 months

The 5th million took 25 months

The 6th million took 21 months

The 7th million took 18 months

The 8th million took 16 months

The 9th million took 14 months

The 10th million took 12 months

That's right. At that point you're minting a million a year. The growth is even more staggering if you increase the R4000 every year by even just 10% (so 4040, etc) - a whole million more at the end.

The three thing I wish someone told me when I was young:

1) Live as cheaply as possible - lifestyle inflation is the enemy

2) Stay out of dept. These days I'm not even convinced a mortgage is justified.

3) Save as much as possible and let the money make money babies.