Back in 2001, at the age of 21, I prepared to send my thirty-nine year old self, husband, and three kids on an epic trip to Japan through the power of compound interest.
A few weeks ago, we took that trip. And in the words of my oldest son, “I knew going to Japan would be fun. But I didn’t know just how much fun it would be.”
It was so much fun that even now, two weeks later, my four year old asks every night to get on an airplane and go back to Japan.
Sometimes, when you’re a saver and not a spender, people will make you question whether or not it’s worth it. They’ll tell you that you should be living for the now, and enjoying today, and that it’s not worth putting aside money while you’re young.
Reader, it is worth it.
For years, I saved between $12.50 and $25 per week for this trip, from my early 20’s until I was 31. I couldn’t tell you the other things I bought over that time that cost twelve bucks, or how many times I went without coffee at Dunkin Donuts and opted for coffee from home instead.
But I certainly can tell you about our trip to Japan.
Sitting here now at thirty nine, I’m so grateful to my early-twenties self who started saving and investing for this trip even before she had kids. Even though she originally thought this money would be used on a trip for her and her husband on their tenth anniversary, and that changed, it was OK. It was there to be used for whatever her future dreams ended up being.
Let me show you just how my early-twenties self made my current dream a reality. I’ll also share with you a video of all our adventures,
VIDEO BONUS – you get to see my 21 year old self attacked by pigeons.
We all win today here on CMO!
Investing: The Early Years
My journey to this trip started back in 2001. My husband and I had a $2,000 wedding, with my wedding dress coming from Hot Topic and our wedding occurring in a park. Instead of spending big on a wedding, we decided to spend big on a honeymoon in Japan.
We had a wonderful time, and once we got back, we dreamed of one day returning. Maybe for our tenth anniversary, we thought back then, having no idea what life was going to bring us over the years.
And boy, did those years bring changes. Before our tenth anniversary, we had two kids, sold our condo and bought a house, my husband lost his job, and more. And only a few months after our tenth anniversary, my husband would go into septic shock in the event that would change our lives forever.
For this dream Japan trip, I decided that I should open a specific investment account to help fund it. My reasoning at the time was that since it was around ten years in the future, market growth could help propel us towards our goal, instead of us having to save every dollar ourselves. Since this was a nearer term goal, though, I didn’t want it entirely subject to the whims of Mr. Market. So I decided the best course of action was to open a balanced stock/bond fund, and picked the Vanguard STAR fund.
Now, if I was doing this all again, I would pick index funds. But alas, my early 20’s self was not nearly as confident in her investment picking abilities as I wish she was.
So I saved up some money and opened this STAR fund. I then set up automatic investments to contribute a little bit every month towards this dream. At first it wasn’t much – $50 a month or so – and even later the highest we ever contributed was $100 a month.
Then, in 2011, we stopped contributing. Anything. 2012 was the year my husband almost died, and we tapped the fund to go on a trip to Phoenix, AZ the weekend before my husband was to have a major reversal surgery.
After that, our other goals of eliminating debt while continuing to save aggressively for retirement and kids college took precedence over this dream. But even though we were working towards debt freedom, we never tapped this fund. It was tempting to tap it to hasten our journey to debt freedom, but I found having the dream pot of money as our pot of gold at the end of the debt freedom rainbow was a good incentive to keep on trudging along.
What We Put Aside
I checked my Vanguard account to see just how much we actually contributed to the fund over the years. After doing that, I was surprised at the results.
Other than the year we opened the fund, the most we ever contributed in a single year was $1,200. Most years, we put in well under a thousand dollars – around $600.
All told, over the course of those ten years, we put aside around $10k into the fund. Since we were automatically investing, we were able to pick up extra shares in 2008/2009 when the market crashed. Of course, we sold off thousands of that fund to go on a last-minute AZ trip. And then we essentially ignored the fund for almost a decade.
The Power Of Compound Interest
But although we ignored the fund, it did not ignore us. Or more accurately, the market did not ignore us.
As we slept, ate, took care of the kids, paid off the car loan, and so on, the fund kept making money. Dividends and capital gains spun off every quarter, and went right back to buying more shares. This repeated over and over again until the value of the fund more than doubled.
That’s right – because of this fund, and the power of compound interest, we were able to take an extraordinary trip to Japan. It’s not cheap to fly five people to the other side of the planet, especially if you don’t have time to/don’t have the desire to travel hack. Same with hotels – you actually need two separate hotel rooms when you have five people. That’s also five breakfasts, lunches, and dinners you need to buy every day. Not to mention transportation costs (for five!), admission costs (for five!)l.. the list goes no.
Thanks to this fund, none of that was a worry. We had everything we needed – and then some – to take this trip and pay for it with cash. Once we paid off the mortgage, we pulled the trigger on our dream fund and booked our trip and tour shortly thereafter.
What Did We Do?
So what did we do in Japan? Tons of stuff.
We visited Tokyo, Mount Fuji, Kyoto and Osaka.
We saw sights that we saw back in 2001 – and new ones to us.
The Ghibli Museum, Pokemon Center (at Tokyo Skytree), Tower Records, Suginami Animation Museum, Nakano Broadway, and Akhiabara were on our “otaku” list.
We also saw tons of more traditional sites – Tokyo Tower, Tsukiji Outer Market, Asakusa Kannon Temple, Osaka Castle, the Imperial Palace, a ninja museum, Mount Fuji (although it was raining), and the deer park at the Today Temple.
We participated in a tea ceremony, learned to make sushi, had Hoto Fudo (which is hot food but doesn’t mean hot food), saw a kimono fashion show, and rode a bullet train.
And the food! So many people think only of sushi when they think of Japanese food. Well, have you ever heard of pizza buns? Real ramen is amazing, as is sukiyaki. Tempura, nabe, and other delicious foods took us “beyond the sushi” and into a much more well-rounded version of real Japanese food.
If you’d like to check out all these things and more, plus the BONUS of me being attacked by pigeons at 21, check out the video below.
What are your dreams? Are you saving and investing for something your future self will get to enjoy? If not, why not start today? Small amounts over time add up to large amounts – and those amounts compounded are a powerful force.
I hope to one day read about your dreams, made possible by your younger self.
I would love to stay in touch!
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