Find out more on Debt Consolidation Credit Counseling In Phoenix Now!
Wednesday, March 4, 2009
The difference between investing today and investing tomorrow can be a lot of money. Even if you just invest $1,000 now and waited 20 years or invested $1,000 in 10 years and waited another 10, there would be quite a bit of difference.
The longer the wait, the less money you have. Time is money and if you waste it, it's like you're wasting money. Just as you get paid for your time and efforts at work, with investing, you'll get paid a lot more with more time. The sooner you start, the more you'll make.
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.
If you are young, such as in your 20s, you have a huge advantage. If you start investing, even putting the same amount aside overall, now and your friends start investing in their 40s, you'll have a lot more money.
If you start investing $1,000 a year from the time you are 25 until 65, you will have invested a total of $40,000. With an annual 9% return, guess how much money you'll end up with? You'll have about $365,000. That is a huge difference from $40,000 to $365,000. Just think about how much you could have if you invested even more each year.
What would happen if you started investing later in life, let's say at age 40? Even if you instead invested $2,000 a year for 25 years, you would have invested $50,000. That is more, so you should have a lot more in the long run, right? In this case, you would end up with $183,000.
When you combine time and compounding, you make a powerful combination. It's incredible how much more money you can make when you start early. Compounding will earn you more money because the money you earn each year will continue to earn money. If you want to retire comfortably, or even early, you must harness the power of time and compounding.
There is no set amount of money that you must start investing now. You could start out very small and then as you begin to earn more, start contributing more. Start by taking 2% of your income and investing it for retirement, then add a percentage point more each year to your contribution. When you hit 20%, you might find you are in a good place to retire early.
The longer the wait, the less money you have. Time is money and if you waste it, it's like you're wasting money. Just as you get paid for your time and efforts at work, with investing, you'll get paid a lot more with more time. The sooner you start, the more you'll make.
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.
If you are young, such as in your 20s, you have a huge advantage. If you start investing, even putting the same amount aside overall, now and your friends start investing in their 40s, you'll have a lot more money.
If you start investing $1,000 a year from the time you are 25 until 65, you will have invested a total of $40,000. With an annual 9% return, guess how much money you'll end up with? You'll have about $365,000. That is a huge difference from $40,000 to $365,000. Just think about how much you could have if you invested even more each year.
What would happen if you started investing later in life, let's say at age 40? Even if you instead invested $2,000 a year for 25 years, you would have invested $50,000. That is more, so you should have a lot more in the long run, right? In this case, you would end up with $183,000.
When you combine time and compounding, you make a powerful combination. It's incredible how much more money you can make when you start early. Compounding will earn you more money because the money you earn each year will continue to earn money. If you want to retire comfortably, or even early, you must harness the power of time and compounding.
There is no set amount of money that you must start investing now. You could start out very small and then as you begin to earn more, start contributing more. Start by taking 2% of your income and investing it for retirement, then add a percentage point more each year to your contribution. When you hit 20%, you might find you are in a good place to retire early.
About the Author:
You really shouldstart investing right away ifyou want to retire comfortably, early, or even at all. Take the time now to educate yourself about different Types of Investments and start investing now!
posted by Credit Counseling at
10:58 AM
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home