All in the Timing
Posted By: Dr. Frugal in Saving on 09/02/2007 at 17:14:28
Starting a savings regimen early is about on par with flossing your teeth--you know you should do it but come on, if I don't am I really in that bad of shape· Look at savings plans like this--they're a proven way to built wealth and employs the power of compound interest for you.
Steve (age 30) invests $10k at 6% and doesn't it touch until he's 55. That $10k is now over $44k. Mike, Steve's more apathetic older brother, invests $10k at age 35. When Mike turns 55, his account is only worth $33k--the five year delay cost him almost $15k.
If Steve holds onto that money for another 10 years his balance will be over $81k and Mike's $60k. Mike is now down by over $20k just by waiting five years to start saving.
Don't give up hope just because you're a little older and have not started a savings regimen. You can still use the time you have left to invest that money--you'll just have to start with larger sums.
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Financial Planning Acronyms
Spending can be saving
Building Your Savings
Time Is Money