It was such a
privilege for me to be able to share some financial insights with the audience,
when they are in the prime of their financial lives! Now you might think “hang on, if they are
only 15-25 years old how can they be in the prime of their financial
lives?!?”.
They have one thing
that those of us with a few more years under our belt would give anything for.
They have TIME.
How does Time =
Financial Success? Simple, it’s all in
the Power of Compound Interest.
Yep, it’s not
rocket science, but it amazes me how many of us do not give it the attention it
deserves.
I used a simple
example of three people who saved $1,000 per month for 10 years. In total each of them invested $120,000 over
a 10 year period. We are also going to
assume that the interest rates and investment were all exactly the same for
each investor over the entire period of the example.
Michael invested
his $1,000 per month when he was aged between 25 and 35. Jennifer waited until she was 35 to start her
10 year saving plan, and Sam didn’t start until he was 45.
Each investor saved
the money over the 10 year period and then let it sit there until they were
each aged 65.
At age 65 Michael’s
investment now totalled over $1.4million!
Jennifer turned her $120,000 into just over $730,000. However, Sam only received $370,000 when he
turned 65. The only difference? When they started investing.
From this example
you can see how much of a difference it makes to start early! You might not have $1,000 a month to put
aside, but even a small amount put away while you are young will outgrow a
larger amount that has a shorter investment time frame. So get started NOW!
At Sothertons, we
are committed to improving your financial position and helping you become
financially well-organised. Call our professional team on 4972 1300 and let us
help you.
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