How to Retire Broke

A while back, I took part of a Friday off and went to the mountains to play poker. It was a beautiful day -- I'm talking Rocky Mountain beautiful -- and the drive alone made my day. But I should've done something else.

And not just because I got creamed at the poker table, either. (Don't ask. I played average, at best, and took some tough beats.) The real lowlight would come later that night, in a chance encounter.

Could you spare a quarter for a house?
As I strolled out of the card room after midnight -- oh, how I wish I'd left early -- a woman in her late 30s or early 40s asked me for a quarter. She'd had more than a little to drink and explained to me that she needed it to play a machine. Her goal, it seems, was to win a house.

That's right, I really said a house. Sounds like something that could make you go broke slowly and painfully, doesn't it?

I didn't have a quarter and so moved on, but that didn't stop this woman in her quest. I watched her accost several more people on their way out of the casino. I'm not sure how much she collected, and I never did see her go back inside to yank on her one-armed bandit of choice. Still, the scene struck me as remarkably sad.

Invest your quarters
I now realize that my dismay comes from experiencing firsthand the desperation that oozes from someone who is in constant quest of the "big score" that will change their lives. But I also find myself in awe of how little respect this poor soul had for the almighty quarter.

Seriously. Have you ever figured out what you'd have after 20 years if you saved just one quarter a day? I have. Check out the table below. The totals assume you'd be earning 8% a year in a simple index fund such as the Vanguard Total Stock Market (FUND:VTSMX).

That's right; just a quarter a day invested in giants like Archer Daniels Midland (NASDAQ:ADM), Disney (NYSE:DIS), General Mills (NYSE:GIS), McDonald's (NYSE:MCD), and United Technologies (NYSE:UTX) nets you more than $4,500 after 20 years. Not bad, eh? Well, it gets even more interesting if you stopped right there, and didn't invest another quarter for the next 10 or 20 years. In that scenario, your 8% annual return would bring you $9,736.41 in a decade and would more than double to $21,020.16 after 20 years. Still interested in the one-armed bandit?

Look, I realize the apparent hypocrisy of this column. I mean, really, what the heck am I doing preaching to you about saving your quarters when I'm off blowing moola on poker? I can get away with it because I gamble only with money I can afford to lose, and poker is part of my entertainment money. That's not to say I don't try to win; I just don't ever assume I'll pay for anything -- especially a home or our retirement -- through gambling.

Retire rich instead
Often, the path to a rich retirement begins with small investments, sometimes as small as a quarter. Tips and tricks for socking away the moola to retire early abound on our discussion boards.

Or you can get professional help if you've already got a few quarters socked away. Foolish colleague Robert Brokamp, editor of Motley Fool Rule Your Retirement, has the skinny on everything from retirement investing strategies to buying insurance to taxes and estate planning. In January, one of Robert's Foolish compadres wrote an insightful feature on the real tests of asset allocation. Just say the word and we'll give you unfettered access to our new issue -- and every back issue in our archives -- free for 30 days. There's never, ever an obligation to buy.

This article was originally published on Aug. 30, 2005. It has been updated.

Fool contributor Tim Beyers still enjoys playing poker, but he hopes you'll never catch him trying to win a house from a one-armed bandit. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out what is in his portfolio by checking Tim's Fool profile, which is here . Disney is a Motley Fool Stock Advisor pick. The Motley Fool has an ironcladdisclosure policy.