"Start Investing Today"
Time isn't just something that passes; it's the most powerful tool for building wealth. Starting early is the key that unlocks the door to a secure future.
Why You Should "Start Investing Today"
Many wonder why investing is essential. The answer is straightforward: without growing your assets through investment, the retirement you dream of may remain out of reach.
In this article, we'll present graphs and data illustrating why investing today is key to achieving your retirement plans.
We'll use an assumed annual return of 7%, based on an average stock market return of 9% minus 2% inflation.
Skip the Caramel Macchiato for a Million Dollars
The title might seem unrelated, but imagine this:
Suppose you buy a coffee every day for $6.75
(Price of Caramel Macchiato from Starbucks: https://starbucks-menu-with-prices.com/hot-coffees-menu-prices/caramel-macchiato/).
If you start making coffee at home and invest that money in the stock market:
Your savings could grow to over $200,000 in 30 years.
In 50 years, you'd have your first million dollars.
This example highlights how investing small amounts daily can accumulate substantial wealth over time. Increasing your investment amount can help you reach a million even faster.
From Coffee and Lunch to a Million-Dollar Path
Beyond making coffee at home, consider preparing your own lunch:
You could see your first million dollars in year 34, or within 35 years.
Continuing this for 60 years, your investment portfolio could exceed $6 million.
Why Starting to Invest Today Is Crucial
Let's look at investors A, B, and C, each investing $200 monthly but starting at different times:
Investor A starts at age 20. By 60, their portfolio exceeds $500,000.
Investor B starts at 30. By 60, their portfolio is about $242,000. Starting just 10 years later results in less than half of A's savings.
Investor C starts at 40. After 20 years, they have only $100,000.
Total savings
Investor A invests $200 monthly from age 20, totalling $96,000 over 40 years.
Investor B invests $200 monthly from age 30, totalling $72,000 over 30 years.
Investor C invests $200 monthly from age 40, totalling $48,000 over 20 years.
The results are clear: Investor A’s portfolio is significantly larger, but the reason is not just that they invested more money—it’s because they started earlier—"TIME IS THE KEY”.
Time Matters More Than Investment Amount
Time in investing is so crucial that Investor A could stop investing and still have more money than Investor B at age 65.
If Investor A invests $200 monthly from age 25 to 35 (then stops), totalling just $24,000 over 10 years, their investment would be nearly $300,000 by age 65.
Meanwhile, Investor B invests $200 monthly from age 35 to 65. At 65, they have only about $242,000, despite investing three times more ($72,000 = $24,000×3) over their lifetime.
Missing the first 10 years of investment means they can't surpass Investor A.
Thus, starting to invest early is more important than the amount invested.
Starting earlier yields better results. Even if Investor A stops investing at 35, their money continues to grow more than Investor B's, who invests until 65.
Beginning early gives your money more time to grow. Starting today will yield better long-term results than any investment begun later. Early investing helps you build more security than investing larger amounts but starting later.
This article emphasises the importance of starting to invest today or at a young age.
Even small investments early on can significantly increase in value over time, leading to future security.