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The Magic of Compounding & How I Should Be Retired by Now
If I’d known in my 20s what I learned in my 40s, I’d be all toes in the sand.
If I had a nickel for every nickel I could have invested relatively pain-free in my first three decades of full-time employment, I’d be on some beach right now drinking way too many Mai Tai’s. No question. Instead, in my 50s, I’m playing catch-up for a chance to retire in my 60s, and it’s the steepest of uphill climbs.
Put simply, I was stupid with money. Here’s what I know now that I probably heard but didn’t listen to back then:
Saving early, even modestly, and letting investments compound over time is as close to financial alchemy as you can get without risking your money on popular investment strategies that will almost surely put more money in the pockets of a broker than in your own.
But don’t listen to me. Just look at the math of what the most respected financial experts call the magic of compounding.
Anna vs. Zack
Anna started investing $1,000 from her part-time job at age 20. Every year, as her income gradually rose, she invested $200 more than the year before. Then at age 45, she quit saving altogether, took a new job she loved that paid the bills well enough, and just let…
