Time is on your side
When someone is questioned about saving money, they often say “I know I need to save money. I’ll get around to setting up an investment account some day”.
If you actually have money to set aside and you say crap like this then you are f’n stupid. Ok, ok, that was harsh, but seriously, go setup an investment account now. It could be your 401k, a Roth IRA, high yield savings account or whatever. You just need to do it.
Take a gander at the chart below (yes I just said ‘gander’). It details out two different scenarios. In example 1, the person started investing $4,000 a year. He invested $4,000 each year from when he was 19 until he was 26. Then, he never invested another dollar. Person 2 waited until they 27 to start investing. They invested the same amount per year ($4,000) from the age of 27 until they retired at 65. You would think that since person 2 invested a total of $156,000 as compared to the $32,000 from person 1, that person 2 would end up with more money, right? Wrong.
*This chart is assuming a 10% annual return
Because person 1 started investing earlier in life, he was able to let the power of compounding take over and make money more even though he invested far less. He only invested 32k but ended up with over $2 million. How badass is that? Person 2 had to invest $156,000 and ended up with less money ($1.61 million) just because he started later. What I am getting at, is that you need to start investing now. Putting it off any longer is costing you hundreds of thousands of dollars.
If this chart convinced you to start investing but you still aren’t sure where to start, just email me at derek.homann@yahoo.com and I will be happy to get you pointed in the right direction.
