It sounds impossible doesn't it! When it comes to investing it can be possible and timing is everything. Take the scenario below.
The first person is 21 years old and invests $400 per year for five years which is a total contribution of $2,000. His investment continues to accumulate interest until retirement when he now has $39,437.
The second person waits until he is 38 years old. He also invests $400 per year but for 30 years which is a total contribution of $12,000. At retirement his investment has only grown to $37,784 so $2000 is more than $12,000.
Try out your own scenarios with our Compound Interest Calculator.
| Starts Investing
at Age 21
at Age 38
|67||Age at Retirement||67|
|7%||Rate of Return||7%|
|$2000||Total Amount Contributed||$12,000|
Value at Age 67
This is for illustration purposes only and is not a guarantee of results.
|High Cost of Waiting||175.95 KB|