The earlier you start investing, the more money you can accumulate. Here are two scenarios to help illustrate just how valuable time is to reaching your investment goals. Both scenarios assume a 10% rate of return that is compounded annually.
Scenario 1: At age 30 you start investing $100 per month until you reach the age of 65. At that point you will have about $345,000 in investments. In total you put $42,000 into your investments over 35 years. The other $303,000 is from the growth of your money over time.
Scenario 2: At age 20 you start investing $100 per month until you reach the age of 65. At that point you will have about $916,000 in savings. In total you put $54,000 into investments over 45 years. The other $862,000 is from the growth of your money over time.
An extra 10 years can go a long way to helping you reach your investment goals. In the above examples, it made a $571,000 difference!
