What's the difference if I invest now or if I wait a year? The difference can be quite substantial.
If you still have a long time until you retire, or if you are retiring in the near future, investing now will benefit more than if you waited 1, 2, 3, or more years to start.
Time is money; it's the simple truth.
We spend our time working and are paid for it.
It takes time for a writer to write a book that they eventually collect royalties on.
A teenager spends a few hours of her time watching kids and is paid for it.
You have to give up some time to make money.
Investments are the same way.
You can't buy a stock and expect it to go up 50% in the next 10 minutes.
It takes time for the return to accumulate.
While you don't have to directly work hours and be paid, you do have to put some thought into investments and wait.
The younger you are, the more money you can make.
Just like investing more will likely make you more, waiting longer will make you more as well.
If you want to know the true power of investing right now, just look at this example.
Let's say you are 25 years old.
You plan on retiring at the age of 65 in 40 years.
You decide to invest $500 every year for those 40 years and expect an average return of 9%.
Over the 40 years, you will have invested a total of $20,000.
In 40 years, you will have approximately $182,000.
Now let's say you decide you can't invest that much right now because you are just having too much fun spending money.
Instead, you wait until you are 35 to start.
You will invest the same amount of money overall, $20,000, but because you waited 10 years, you invest more per year equal to about $667 a year.
You can't possibly earn that much more with an extra 10 years, right? If you invest $667 a year for 30 years, you will have approximately $98,000 by the time you retire.
By waiting 10 years to start investing, you lost about $84,000.
You invested the exact same amount, but with more time, you made $84,000 more.
That is the power of time plus compounding.
Compounding means you continue to earn money on the money you already earned on top of the principle.
The more time you have, the more time you money has to earn.
This doesn't mean you have to invest $500 a year.
You could invest more or less.
The point is, you need to make plans and goals NOW.
Don't wait until it's too late.
You don't have to be cheap and live like a mortar in order to invest enough, just budget your money and start investing now.
By the time you retire or need to buy a house, you will be so happy you did.
If you still have a long time until you retire, or if you are retiring in the near future, investing now will benefit more than if you waited 1, 2, 3, or more years to start.
Time is money; it's the simple truth.
We spend our time working and are paid for it.
It takes time for a writer to write a book that they eventually collect royalties on.
A teenager spends a few hours of her time watching kids and is paid for it.
You have to give up some time to make money.
Investments are the same way.
You can't buy a stock and expect it to go up 50% in the next 10 minutes.
It takes time for the return to accumulate.
While you don't have to directly work hours and be paid, you do have to put some thought into investments and wait.
The younger you are, the more money you can make.
Just like investing more will likely make you more, waiting longer will make you more as well.
If you want to know the true power of investing right now, just look at this example.
Let's say you are 25 years old.
You plan on retiring at the age of 65 in 40 years.
You decide to invest $500 every year for those 40 years and expect an average return of 9%.
Over the 40 years, you will have invested a total of $20,000.
In 40 years, you will have approximately $182,000.
Now let's say you decide you can't invest that much right now because you are just having too much fun spending money.
Instead, you wait until you are 35 to start.
You will invest the same amount of money overall, $20,000, but because you waited 10 years, you invest more per year equal to about $667 a year.
You can't possibly earn that much more with an extra 10 years, right? If you invest $667 a year for 30 years, you will have approximately $98,000 by the time you retire.
By waiting 10 years to start investing, you lost about $84,000.
You invested the exact same amount, but with more time, you made $84,000 more.
That is the power of time plus compounding.
Compounding means you continue to earn money on the money you already earned on top of the principle.
The more time you have, the more time you money has to earn.
This doesn't mean you have to invest $500 a year.
You could invest more or less.
The point is, you need to make plans and goals NOW.
Don't wait until it's too late.
You don't have to be cheap and live like a mortar in order to invest enough, just budget your money and start investing now.
By the time you retire or need to buy a house, you will be so happy you did.