“Why do we need to go to school, get an education and go to work? We just put our money in the bank, play videogames for a year and get free money.” – This was the question one of my students asked after we discovered the power of compound interest. I must admit, I got scared for a few seconds… How shall I respond now? I started imagining angry parents telling me to stop putting silly ideas in their children’s minds.
Nevertheless, I pushed ahead and transferred this question as a homework, which everyone eagerly embraced: “How much money should you have in the bank in order not to work and play video games all day long?”
This homework was a very good exercise in which the kids practiced their budgeting skills, got a feeling of interest rates offered by banks and “played around” with investment calculators.
Conclusion? $2 to$4 million would be required to allow worry-less life of leisure. The same kid admits that “probably it’s not such a realistic idea and he will need to work after all.”
I smiled and closed the class with a few words of wisdom about the importance of saving and investing early on.
Founder of Fun Finance