Lets start with the below video to get some perspective:
While balance is the key, we can implement strategies to use ‘time’ to our advantage. We don’t want to just get through the day/week. We need a long-term strategy.
Being 36 I’m still in a good position to still utilize time, but I wish I was 10 years younger. What a difference that could make. My kids are in a good position as I’ll be sure to pass down this knowledge to them.
Let’s have a look at some scenarios and strategies. Investment Tracker has all these tools to help you forecast and keep you on track – detailed below.
Scenario 1: John and Paul
John had a great upbringing, his parents looked after him and paid for a lot of his expenses. He finished high school, went to University and ended up getting a degree in a well-paying job. He started working at age 25. He started to invest at age 35 after he was set up with a house and married, kids etc. He put in $100 a week. At say 8% growth annually he could have roughly $380,410 at 60 years of age.
Paul didn’t have a glamorous upbringing like John but was taught about money and saving. He left school early and became a Tradesman earning money from age 16. Knowing the value of compound interest he asked his old man to open an Investing account for him. He took it over when he was 18 years old. He managed to put aside $100 a week like John but started 19 years earlier and was lucky enough to start with a $2000 deposit. At the same 8% a year Paul has over 2 million dollars at age 60! 1.7 million more than John! At age 50, he would have had $873,000, a figure he could probably retire on combined with his super and other assets.
Looking back on your life now, how easy would it be to put away a small amount each week, even if it was smaller than the $100 a week scenario above.
Scenario 2: Saving for your children.
Life is hard enough and a child is extremely expensive. With that being said a small amount put away each week from birth or a young age can be staggering. What is an extra $10 a week? I bet most can manage it. If you save $10 a week since your child was born and invested that money, drum roll, please…..
He or she could have $30,000 for their 21st Birthday (8% annual growth). Imagine that for a 21st Birthday present. If your child was smart, he’d leave it invested and even if he didn’t add any deposits that total could grow to over $300,000 by the age of 50! Up the deposit from $10 a week to $100 a week from age 21, it would total nearly $850,000! Another early retirement maybe?
One $5000 deposit since you were born and no further deposits compounding at 8% per annum, just left invested and forgotten about. $270,000 by age 50!
In my opinion, investing is a must. The sooner the better. Sitting your money in cash will barely keep up with inflation, you will probably lose money.
There are many ways to Invest. Personally, I think the stock market is the best asset class and historically it has massively outperformed all other forms of asset classes averaging 10% a year. Other Investments could be:
4. Fixed Interest
5. Rare / Vintage items
Platforms like Raiz make investing easy these days. It specialises in micro investing. (Formerly was known as Acorns)
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This is not investment advice.