The Price of Procrastination
You know that feeling you get in your stomach when there’s something you need to do but you decide to put it off? When you choose to let that thing loom over you for days, weeks, or even years, rather than simply do it?
“Building wealth takes time. Start now.” – Kevin O’Leary aka Mr. Wonderful
You know that feeling you get in your stomach when there’s something you need to do but you decide to put it off? When you choose to let that thing loom over you for days, weeks, or even years, rather than simply do it? There’s a word for it, of course… Procrastination! Though we can delay some tasks without any consequence (a pile of laundry, for instance), that’s not always the case. One area where the price of procrastination is especially high is within your personal finances. Waiting to open an investment account, for example, can be a costly mistake. Don’t believe me?
Read our story about twin sisters Millie and Hope. Millie invested $500/month and retired with more than Hope who invested $1500/month. How did she do it?
The Story of Millie and Hope…
Twin sisters, Millie and Hope, couldn’t be more different. Millie has the millionaire mindset. She’s a planner and a woman of action, always getting a head start on her goals and to-do lists. Hope, also true to her name, is optimistic about the future, trusting that things will work themselves out on their own. She is constantly putting off until tomorrow what she could get done today.
Wasting no time, Millie started investing when she turned 25 years old and put $500 per month into a well-diversified portfolio for the next 10 years totaling $60,000. Proud of her early progress, Millie stops contributing to her account at 35 but leaves the money invested.
Hope, on the other hand, is unconcerned about retirement and hopeful her career path is one that will come with a generous salary later in life. She decides to wait until her income is higher to begin investing. At the age of 45, she finally has a plan and the means to execute it. She’ll invest $1,500 per month for the next 20 years for a total of $360,000!
I know what you’re thinking…
“That sounds pretty good! If Hope invests three times as much money as Millie for twice as long, that will surely make up for lost time.” Here comes the good part. Millie’s head start outweighed Hope’s extra effort later in life.
On the bright side, both Millie and Hope were successful in building wealth by committing to recurring monthly investments. Millie finally became a millionaire and Hope grew her account to roughly $900k!
*Disclosure: This figure shows hypothetical examples of compounding over time, with an assumed growth rate of 8%, compounded each year and assuming the funds stay invested throughout the investment period. Returns are hypothetical annualized returns, assuming a properly diversified investment portfolio. 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 on the power of compound interest over time, and it is not intended to be taken as advice or a recommendation for any specific investment product or strategy.
The $700,000 price tag…
An early start means it saved Millie $300k of investment contributions (Millie’s investment of $60k vs Hope’s investment of $360k) and generated over $400k more of investment gains than Hope when they each turned 65. The “price” Hope paid for waiting was more than $700k! Procrastination is an easy choice in the present and a difficult reality in the future.
Give yourself the gift of time.
When it comes to investing, time may be your greatest ally. If you want to get started but don’t know how, invest a few minutes to see how you can make investing really simple. With Beanstox, you can open an account in minutes, get a personalized and diversified portfolio, and set the investment amount you want added automatically to your account each month. Get started today. You’ll thank yourself tomorrow.
Get Started With Beanstox
Set yourself up for a better future, with the freedom and security that come from having a growing portfolio. Download Beanstox and set up your automated recurring deposits today!
