How many times have you thought about doing something and then decided that you would “start tomorrow” instead? We are all guilty of this. From eating right and staying healthy, to saving and investing, we are our own worst enemy.
When it comes to investing, time is money. Just look at the difference in value between Julian and Jade’s retirement accounts at age 65. Jade’s account is larger even though she contributed $96,000 less than Julian. The sooner you get started, the more your money grows.
Save early, often, and consistently. If you invest $100 (principal) and earn a 5% return on annual basis, you will have $105 by end of year one. By end of year two, you will have $110.25 ($105 x 5%). Your interest earns interest.
Compounding interest is a powerful factor, turning even the smallest investment into a meaningful one down the road. There is no time like the present (and no amount too small!) to get started!
Take Action Now!
- If you’ve recently gotten a raise, think about saving the increase towards your goals.
- Increase your retirement plan contributions. For those under 50, the maximum 401k contribution for 2024 is $23,000.
- Contribute the max to an individual retirement account (IRA) or, if eligible, a Roth IRA ($7,000 for 2024).
- Establish an auto-savings plan directly from your paycheck to an interest-bearing or investment account.