Time is money; start today
The most important key to retiring rich is to start saving as early as possible. Many workers, strapped for cash or eying a major purchase, tell themselves they can make up for lost time by making higher contributions in future years. Unfortunately, money does not work that way. Thanks to the power of compound interest, cash invested today has a disproportional impact on your wealth level at retirement.
To put the matter into perspective, consider two possible scenarios; both assume a retirement age of 65 and an annual compounded rate of return of 10%. John is 40 years old and invests $20,000 a year for retirement. Charlotte is 21 years old and invests $5,000 a year for retirement. By the time each of these individuals retire, they will have invested $400,000 and $220,000 respectively.
Yet, because of the power of compound interest, John would retire with half the money as Charlotte despite investing twice as much! (John would retire with $1.97 million, Charlotte with $3.26 million).
The moral of the story? Stop robbing your future to pay for today
Call me for a FREE evaluation of your own financial situation,
Jesse Alvarado
(562)822-5565
No comments:
Post a Comment