Case 1:
• $2,000 invested annually in years 1 to 5
• No contributions after year 5
• Assumed rate of return of 10%
• Interest compounded annually.
• All interest is reinvested.
• Total invested $10,000
Case 2:
• No money invested in years 1 to 10
• $2,000 invested annually in years 11 to 40
• Assumed rate of return of 10%
• Interest compounded annually.
• All interest is reinvested.
• Total invested $60,000
You have probably seen similar charts on the front of mutual advertisements and although I’m not a huge proponent of mutual funds I think the underlying message is valid---The earlier you start investing the better.
3 comments:
years ago I came upon the chart with this concept in 'Smart Couples Finish Rich'; it was a real eye opener for me.
looks remarkably similar to this post dated 3 days earlier
http://americandividendinvestor.blogspot.com/2008/04/thinking-about-investing-start-now.html
ryan,
I also administer that site. It was going to be an American version of this site (just haven't really had enough time for original content on both...)
Post a Comment