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There once were two boys who we will call Tom and Tad. They had a grandfather who did his level best to help them prepare for the future. Gramp taught them many things, one of which was to begin early preparing for retirement. He took them to New York City, toured the stock market on Wall Street and taught them about such things as stocks, bonds, and mutual funds. At seven years old the boys could recite the formula for becoming a millionaire.
When he turned 22, Tom remembered Grandpa’s advice and invested $2,000 into an IRA and continued to do so for eight years, investing a total of $16,000. When he turned 30, Tom stopped adding any money to his account but he left his money there for the next 35 years, that money all the while compounding at 10 percent interest. Times were good. By the time that he retired, Tom had accumulated the tidy sum of $642,750; not a bad way to supplement his Social Security income.
Tad, however, loved the good times and fancy cars. He too remembered what his grandfather had taught him about investing early and after sowing his wild oats, he began contributing $2,000 to an IRA on his 30th birthday and he continued to do so every year for the next 35 years. By the time he was ready to retire, Tad had invested $70,000. He too was fortunate enough to be able to invest that money at a 10 percent interest rate. We should be so fortunate. When Tad retired, at age 65, he too had a nest egg but in spite of the fact that he had laid aside a total of $70,000, the eggs in his nest only amounted to $542,050. How come? Why did his retirement savings amount to $100,700 less than Tom’s who had invested only $16,000 and stopped investing 35 years ago?
The answer is the power of compounding interest. The sooner a person starts saving, the longer the money has to grow. Too bad, Tad. You should have listened to Grandpa.
In Luke 15:11-32, Jesus told the story of the prodigal son. That young man took no thought for the future, but when his father gave him his inheritance, he quickly left home and squandered it on “riotous living,” verse 13. He was concerned only with instant gratification and consequently was reduced to groveling with the swine. He never realized how good he had it until he had lost everything; that foolish young man lacked an appreciation of what his father had done for him and his act of disrespect brought about his downfall.
So many people find themselves in that same position today. Many who wasted their early years on riotous living; alcohol, drugs, and just plain sin have ruined their lives. They have made no provision for the future, and ultimately have been reduced to living on the streets, unable to sustain themselves.
Young people, arise! Prepare for your destiny. Work hard and get a good education so that you will be able to support yourself with a vocation that you can take pride in. Prepare for the years ahead and, most of all, prepare to meet your God. Put your faith in God by endorsing His word; if you haven’t already done so, obey the Gospel, and live a sober, righteous and godly life. In that way, you will be preparing for the most important thing of all: an eternity in the presence of God.
Gene Dumas is preacher at Manatee Springs Church of Christ.