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Meet Curt Degerman.

For 40 years he spent his days searching through the bins of a small Swedish town called Skellefteå. Looking for scrap metal and tin cans.

After he died of a heart attack aged 60, it was discovered he had left behind a portfolio of stocks and shares worth at least $1,100,000 and a safety deposit box containing 124 gold bars valued at $375,000.

Curt hardly ever spent any money. He wore same filthy blue anorak for years on end and used to eat leftovers from the waste of a fast food restaurant.

But every day he would go to the library to read the daily business newspaper, using what he learned to help him choose his investments.

If you Google Curt Degerman, you will be quickly faced with articles such as this one: Tin Can Tramp Was Stocks Genius With Fortune. You can see where the author is coming from: “he must have been a stock market genius to become a millionaire from collecting tin cans”.

The thing is, I’m not sure that’s true.

I couldn’t find much information on how much a tin collector in Sweden makes, but in San Fransico bottle and can recyclers make between $30 and $50 a day. I imagine Curt would have been pretty good at his collecting after so many years so I think it would be reasonable to estimate that he was earning about $1,000 a month.

The Standard & Poor’s 500 (S&P500) is the stock market index of the 500 largest companies in the USA. That means that by investing in an index fund of the S&P 500, you are buying a little bit of each of those 500 largest companies. Index investing is one of the easiest and safest ways to invest in the stock market.

I did some research to see what would have happened if Curt had invested his monthly $1,000 in the S&P 500. Here are my calculations (all prices are adjusted for inflation and taken from here).

Starting in 1975 and running to 2015, Curt’s portfolio would be worth somewhere between $2 million and $2.9 million depending on what fees he paid. Wow. Not just a millionaire but a multi-millionaire.

The ‘genius’ of Curt was not his skills in picking the best stocks, but rather his ability to save such a large proportion of his earnings.

Curt’s story is a great lesson in the power of compound interest – how your savings can grow very quickly if you reinvest the interest. By investing $1,000 (£660) a month over a 40 year period, you only need a 3.4% return after inflation to reach a million dollars.

I think that sort of return is very doable. Looking historically, most index trackers have done a lot better than that. Since 1950, the average return after inflation and with dividends reinvested of the S&P 500 is 7%. Here in the UK, the FTSE 100 (the UK’s biggest 100 companies) was founded in 1984 and has similarly returned 7.9%.

If you start saving and investing when you’re 25, then by the time you reach the official retirement age of 65 you have a very good chance of being a millionaire in today’s money.

Remember – this is not financial advice on how to invest your money but rather my own ramblings on compound interest. I am not qualified or insured to advise you on how to invest your money. If you’re interested in how I personally invest my own money check out this post.