One Dollar in the Future

Take a dollar and look at it.  Not really much, is it?  I think that is why dollar stores have become so successful.

Consider the following facts from New York Times article Don’t Ask.  You can Afford It:

• Dollar General 259 of Americas top 500 companies.
• Dollar Tree now on the list at 499
• Dollar General 8,400 stores
• Family Dollar 6,600 stores
  
• Dollar Tree plans to open 235 new stores and relocate 90 existing stores.
• Dollar General will open 450 new stores and remodel or relocate about 400 existing stores.
• Photo by suburbandollar.

Here is why I suspect the dollar stores are thriving in the economy – because a dollar is nothing to most people.  The dollar is the new penny.  Only the true penny (dollar) pinchers would really care about such a small sum.  So we buy this or that at the dollar store because, hey, it’s only a dollar.

So what could that dollar grow to in the future? (of course we are not factoring inflation or talking about buying power, just simple numeric math):

Take that $1 today and invest it at 10% and here is what you would have:

5 years              $1.61

10 years             $2.59

15 years             $4.18

20 years              $6.73

25 years             $10.83

30 years             $17.45

35 years             $28.10

40 years             $45.26

45 years             $72.89

50 years             $117.39

Photo by beansoup_67

Next time you are in the dollar store and feel like you just need to have the item that will probably just break in a week, ask yourself if you would rather have that one item or $45.26 in forty years.  Forget about the dollar store – apply that rationale to any purchase, and I suspect you will end up spending less than you do now.

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