This weekend I decided to sit down and roll all of my loose change in order to deposit it at Bank of America (BAC). For some reason BAC only accepts rolled coins and will not take more than five dollars in loose change deposits. Regardless, I have always found that loose change is a great way to add to savings. It is one of the oldest ways to save money. Simply look around your house, car, and purse for quarters, dimes, and nickels. It can add up in a hurry.
I have been a long-time supporter of collecting one’s loose change from all cash purchases. In high school we had an off-campus lunch, and my Mom would give me $5 a day for lunch. I would generally be left with some change. It was too cumbersome to haul around and use it to pay for meals, so I started a coin collection from a clay art box I made in art class. Sure enough, every year I could count on about $200 from collecting all of my loose change. Many of my friends would simply toss their loose change in the car and lose track of it, or they would use it at the vending machines just to get rid of it.
Every year I would take my huge collection of change up to the Wells Fargo (where I banked back then), and they would deposit it into my account. Over the course of high school, I probably deposited $600-$800 in loose change. This represented a fairly significant portion of my savings at that time. Let’s meet in the middle and say I earned $700 from my persistence in collecting all of my loose change. When I graduated high school, I was 18 years old. I am now 25 as of the date I am writing this, and if we assume a rate of 10% return, I now have approximately $1,405. That is an extra $705 on my balance sheet for me to invest or spend simply because I made it a habit to take my spare change at the end of the day and drop it into a clay box.
I did it all throughout college, and I still have the habit to this very day. I make more purchases nowadays than I did back then, but I don’t use cash as often, so I probably still save about the same amount every year. This weekend I counted out $177 in coins to be rolled (I ran out of paper to roll more coins), and I went to deposit it.
I started this habit in 9th grade, and I have done it every year since then. I have saved about $200 every year since then, so at a 10% return (since 9th grade it has been higher than a 10% annual return) I now have a little over $4,000. Of that money $2,200 is principal and $1,800+ is investment income. If I continue to do this until I am 65, then I will have roughly $282,000 of which only $10,200 is principal. That is a lot of money for developing a simple habit of dropping spare change into a box every day.
I have always said that getting rich isn’t hard. It takes discipline, and you have to have the will to achieve great wealth. My life is filled with a series of small decisions that will make me very wealthy one day. Saving my loose change is just one of those decisions. There are countless things in my life that I view this way such as the opportunity cost of owning my own ophthalmoscope. Hitting the financial homerun is a great way to become rich, but if you don’t have a stellar idea or huge business opportunity, then don’t be ashamed of getting rich from a string of small decisions throughout life. The sum of these small acts turns out to be a treasure chest full of cash at the end of the road. All it requires is discipline and patience.