A lot of people think that they can delay investing, and probably think now is the time to spend. While it is true that people use their investments in retirement if they have jobs that cover their expenses, you might reconsider your choices if you actually know how much of an advantage you have if you start early.

Let's take Ron 🥷🏻 who is 30 years old. He has some investment targets till he reaches 50.

Ron starts investing $10,000 every year. When he turns 40, his friend Donald 🧔🏻 who is the same age as Ron gets to know about Ron's yearly investment. Now he has also decided to invest till he turns 50, knowing that Ron will invest $200,000(10,000 * 20 years), he decides to double his yearly investment to $20,000 as he only has 10 years left till he turns 50, so he also decides to invest $200,000 (20,000 * 10)

So, this is the scenario

Let us assume their investment portfolio gives them the same average yearly return of 7%. How much do you think both will have when they reach 50? You can also calculate it yourself using our investment calculator.

Ron🥷🏻 will have $409,954

Donald🧔🏻 will have $276,328

Donald will have around $130,000 less for the same amount invested. The reason for this is simple, by the time Donald started investing, Ron was already getting ~$9,000 a year return on his investment he made in the previous 10 years. If Donald wants to have the same amount, then he would have to increase his investment to around $30,000 a year which would result in $300,000 total investment, $100,000 more than Ron.

Investing early gives you significant advantage, the longer you wait the more you pay later