Even without knowing how much I have invested many ask why I am putting aside any money now in my mid-20s when I will presumably have a higher income--and thus more money to spare--in the future. My simple answer--as I am sure most people reading this will appreciate--is compound interest.
One friend in particular could not see how powerful this was after I explained it. As a result, I agreed to send them a series of links about it. Still unconvinced I put together a handful of (fictional) case studies to prove my point. As it finally convinced them, I thought it may be of use to publish it for others to see.
First, let's start by being a little unusual and give you the punch line of this post. What does it seek to prove? Chiefly three things:
- Starting early in investing/saving money is critical for optimising gains;
- If you start early you can have periods when you can't set aside money and yet still reap the rewards;
- You don't need to have large sums set aside but can slowly set aside small amounts of money
Hopefully you will find it of interest. Maybe it will even serve as a useful way of convincing others!
