Investments
You are never too young to start saving and investing. People that start investing when they are young are more likely to develop habits that will last a lifetime. The earlier you start investing, the more money you’ll accumulate over time. To find additional dollars to invest, you might start your own business. Everyone can find money to invest if they analyze and change their spending habits.
Start early. If you want to accumulate wealth, time is the most important factor. The longer you save and invest, the more likely you are to reach your goals and build sizable wealth.
• You can set aside more money to invest over a long period of time than over a short one. That may seem obvious, but many people don’t fully appreciate how powerful the effect of time can be on accumulating wealth.
• For example, if you can afford to save $50 per month, starting at age 5 (assuming someone begins setting aside money for you), by age 65 you will have saved $36,000. ($50 per month x 12 months per year x 60 years) or ($50 x 12 x 60 = $36,000.) That doesn't include any earnings on the dollars you invest.
• If you were to begin saving at age 50, you'd have to save $200 a month in order to arrive at that same $36,000 by age 65 ($200 x 12 x 15 years).
• If you start investing early, you have more time to make up for any investment losses that will occur in some years. Investors that start later have less time to make up for any investment losses. Time will permit your investments to rebound in value.
• The Standard and Poor's (S and P) 500 is an index of 500 large stocks. From 1928 to 2014, the average annual return has been about 10%. While there have been negative returns in some years, people who invest over the long term have profited from owning this index of stocks.
Add to your savings frequently. The frequency of your contributions (e.g. weekly, monthly, or yearly) has an important impact on your long-term success.
• Savings is the process of moving funds into a separate bank account. You segregate money between a savings account and a personal checking account.
• This process helps ensure that you don’t spend the amount you intend to save. You then invest your savings account balance in CD’s, stocks, bonds etc.
• Saving money more frequently means you can add less each time you contribute. This can make it easier to fit each investment into your personal budget. In the example above, starting at age 5, you could save $12.50 per week (Assuming a 4–week month). You could also save $50 per month or $600 per year. The total you’re investing is the same. It’s easier to save smaller amounts more often.
Start early. If you want to accumulate wealth, time is the most important factor. The longer you save and invest, the more likely you are to reach your goals and build sizable wealth.
• You can set aside more money to invest over a long period of time than over a short one. That may seem obvious, but many people don’t fully appreciate how powerful the effect of time can be on accumulating wealth.
• For example, if you can afford to save $50 per month, starting at age 5 (assuming someone begins setting aside money for you), by age 65 you will have saved $36,000. ($50 per month x 12 months per year x 60 years) or ($50 x 12 x 60 = $36,000.) That doesn't include any earnings on the dollars you invest.
• If you were to begin saving at age 50, you'd have to save $200 a month in order to arrive at that same $36,000 by age 65 ($200 x 12 x 15 years).
• If you start investing early, you have more time to make up for any investment losses that will occur in some years. Investors that start later have less time to make up for any investment losses. Time will permit your investments to rebound in value.
• The Standard and Poor's (S and P) 500 is an index of 500 large stocks. From 1928 to 2014, the average annual return has been about 10%. While there have been negative returns in some years, people who invest over the long term have profited from owning this index of stocks.
Add to your savings frequently. The frequency of your contributions (e.g. weekly, monthly, or yearly) has an important impact on your long-term success.
• Savings is the process of moving funds into a separate bank account. You segregate money between a savings account and a personal checking account.
• This process helps ensure that you don’t spend the amount you intend to save. You then invest your savings account balance in CD’s, stocks, bonds etc.
• Saving money more frequently means you can add less each time you contribute. This can make it easier to fit each investment into your personal budget. In the example above, starting at age 5, you could save $12.50 per week (Assuming a 4–week month). You could also save $50 per month or $600 per year. The total you’re investing is the same. It’s easier to save smaller amounts more often.
