The Peyton Manning Story: A few days short of that big bonus!

Peyton Manning, Peyton, Manning, Compounding, compound interest, analysis

Peyton Manning – Franchise Quarterback of the Indianapolis Colts is a free agent.  I am not a regular follower of football but I have heard who this gent is.  Potentially the best quarterback to ever play in Indy or maybe best quarterback ever in all of football.  This article isn’t going to talk about all those statistics that he has amassed, but we really could because finance covers stats and various ratios.  If he was on the roster at the start of the league year he was to be owed $28 million dollars as a bonus.  Did you hear that right, a BONUS!!!

I don’t know if you have been over to see J. Money at Budgets Are Sexy.  If you are over there check out his Million Dollar Club and Millionaire To-Do List.  J asks the rhetorical question, ever dream of being a millionaire.  Sure who hasn’t! Many of us work our life time to have amassed a nest egg upwards of a million dollars to retire comfortably and enjoy the company of our companion. 

If I am striving to have a million dollar nest egg by the time I retire, Peyton Manning just missed out on a bonus of 28 times that by a few days had the Colts kept him on board.  How much would Peyton have if he invested that $28 million with a 7% growth every year for 20 years?  He wants to retire early like many of us in the personal finance blogging world.  For the sake of this we will not consider inflation, because he didn’t get the money so this is hypothetical.  Obviously, if he were doing this analysis he would consider inflation because a dollar today is not that same as a dollar tomorrow.

Money Invested: $28,000,000

Years to grow (retirement): 20

Appreciation/Growth rate: 7%

In 2032, Peyton is going to have a whopping $108,351,164.95.

I hope to have a figure like that if you move the comma two places to the left. 

The magical secret to this formula is the finance principle of compounding.  Basically compounding is making more money on the money that you have already made.  I have a dollar that I invest in year one, after year two I have 2 dollars.  I keep those 2 dollars in there and invest the 2 dollars.  You are making the money that you earned work for you, through this principle of compounding.

 

 PHOTO BY: Angie Six