It’s never too late to start investing, but it makes a HUGE difference the sooner you do. Check out these investment facts that prove why you need to delay no longer and get started on investing right now!
What if you only had $5 per day to invest in the stock market? (Saving money by not buying lunch and coffee or drinks out).
Within 25 years, you will have accrued $100,000. In 30 years, nearing $200,000. After 35 years, close to $300,000. At 40 years, $400,000. At 45 years, nearly $600,000. And at 50 years, over $800,000.
If you started with $0 invested and started investing $15 per day, within 30 years, you would have over half $1 million, and within 40 years, you would have close to $1.25 million. If you had started that habit at age 20, after fifty years of investing, by age 70, you would have $2.5 million.
Let’s look at three different investment scenarios.
Starting at age 25: An investment of $200 monthly equals a total contribution of $96,000, which at the retirement age of 65 years has increased to nearly $525,000. The investment has increased 5.46 times.
Starting at age 35: An investment of $200 monthly equals a total contribution of $72,000, which at the retirement age of 65 years has increased to nearly $250,000. The investment has increased 3.47 times.
Starting at age 45: An investment of $200 monthly equals a total contribution of $48,000, which at the retirement age of 65 years has increased to slightly over $100,000. The investment has doubled.
The takeaway is the sooner you get started, the more compounding interest will add to your investment.
The compounding interest on your investment continues to grow even when you stop contributing money.
Example #1: From ages, 25 to 35 (10 years), investing $200 monthly amounts to a total investment of $24,000. With no further contributions, the investment grows to a value of nearly $300,000 by age 65.
Example #2: From ages 35 to 65 (30 years), investing $200 monthly amounts to a total investment of $72,000. With no further contributions, the investment grows to a value of $250,000 by age 65.
Take away: As demonstrated by example #1, with only ten years of contributions, but allowing the investment to grow through compounding interest ten years longer, the investment earns more money than making triple the contributions. Again, this highlights how crucial it is to begin investing sooner rather than later.
All things being equal, at a 7% return, the compounding interest on your investment will begin to earn more than your contribution within 11 years.
Example: Contributing $200 per month. By the third year, your interest earnings will be $50 annually. By year six, the returns are $100. At year 8, your returns are triple, now at $150. By year 10, your return equals your $200 investment. At year 11, your return is roughly $225, outpacing your $200 investment, according to U.S. News & World Report.