I can wait to start.
People will say, “I can start investing later.”
Technically true. You can wait as long as you’d like.
In fact, it’s human nature to put off difficult tasks.
But when it comes to investing, do we really have time to wait, or is that a lie we tell ourselves to feel better about avoiding it?
See the math and decide for yourself.
Consider this example from the chart above:
A 25-year-old who starts investing $381 per month, a 35-year-old who start investing $555 per month, and a 40-year-old who starts investing $1,234 per month could all retire at 65 with a million-dollar portfolio (assuming a 7% annual rate of return). This shows just how powerful compounding interest can be over time and why starting early is so important. Perhaps the 40-year-old was waiting until they made twice as much money to better afford a monthly investment… Well, over the 15 years it took to double their salary, the monthly amount required to reach that same million-dollar portfolio by 65 had tripled, outpacing their expectations.
Said another way, small amounts of money invested today can be better than larger amounts of money invested tomorrow—so don’t be intimidated by the thought of getting started!
Stay tuned for our next installment of “Lies We Tell Ourselves About Investing,” where we tackle another common misconception about personal finance!
*This hypothetical example of compounding assumes the funds stay invested throughout the investment period. Returns are hypothetical annualized returns, assuming a properly diversified investment portfolio. There are risks and limitations in using hypothetical performance in making investment decisions. Performance is provided for illustrative purposes, and it is not indicative of past performance or any Beanstox portfolio or any client’s experience using the Beanstox App. As such, the chart does not reflect fees or the cost associated with investing. Content is meant for education purposes only, and it is not intended to be taken as advice or a recommendation for any specific investment product or strategy.