Broker Check

It's Best to Invest Now

| June 05, 2020

Investing is a topic many people push off until they are well-established in their lives. People in their 20s may assume that since they have 40+ years until they retire, they can invest when they’re a bit older. However, it is never too early to invest in your future, and waiting just a few years can have a significant impact on your return.

For example, someone who invests from ages 25-35 and stashes away $1000 in an account that accrues 7% interest will have over 1.4 million in their account at age 65. That is only 10 years of saving, and the returns are major.

On the other hand, someone who starts investing at age 45 and invests the same amount over a 10-year period at the same interest rate will only end up with $373,407 at age 65. This is a tremendous difference, and the only change is starting earlier.

Although saving $1000 per month may not be feasible for everyone, especially those who are just starting out on their own, even $200 per month can make a big difference. If you started with an initial $200 investment and saved $200 each month, at an interest rate of 5%, you would have $24,848 after 10 years. That may not seem like a lot, but that could be a down payment on a house or the start of a good retirement fund. 10 years later with the same conditions and you would have over $74,000.

As you can see, investing early can make a big difference with your returns. Even if you can’t invest consistently, taking advantage when you’re able will still set you up for success. Even $10 today will turn into $20 in time. There are few reasons good enough to justify not investing your money while you’re young.

As a final thought, keep in mind that how you invest makes a big difference. Accounts like IRAs and 401(k)s have rates that can help you accurately predict how much money you’ll have at any given age. However, investing on the stock market would be a much more risky investment, so predicting returns is not going to be completely accurate. You may also want to look into diversifying your investments into several types of accounts. To find out which investment makes the most sense for you, visit a certified financial advisor to learn more.

Representatives do not provide tax and/or legal advice. Any discussion of taxes is for general informational purposes only, does not purport to be complete or cover every situation, and  should not be construed as legal, tax or accounting advice. Clients should confer with their qualified legal, tax and accounting advisors as appropriate. 

Ben Soccodato is a registered representative of and offer securities, investment advisory and financial planning services through MML Investors Services, LLC. Member SIPC.   6 Corporate Drive, Shelton, CT 06484, Tel: 203-513-6000