Who wants to make an easy $100,000?

(aka The Compound Factor)

The good news is.. you can. If this interests you please read on.

Most of us have heard people saying things such as:

  • We spend what we get
  • If it comes out of my pay, I don’t miss it
  • I pay it on the first of each month and it’s done

One of the most powerful ways of creating wealth is by regularly investing each month. It can be quite boring but regular saving works. It really does.

To illustrate this, we will look at two ordinary people:

Let’s look at Mr Today and Mr Tomorrow. 

Mr Today starts investing $200 per month right now in 2019 for 10 years then he stops and leaves the investment to accumulate for a further 15 years. 

Mr Tomorrow delays investing for 10 years until 2029 and then invests $200 per month for the next 15 years.

With an investment return of 8.00% per annum, the results after 25 years would be:

  Mr Today Mr Tomorrow
Total Amount Invested $24,000 $36,000
Value after 25 Years $114,702 $67,772


The moral of the story is… Start Today, Not Tomorrow

Even though Mr Tomorrow invested much more than Mr Today, because he didn’t start straight away, after 25 years, he is still a long way behind.

To catch up to Mr Today and have the same amount in 25 years, Mr Tomorrow would need to invest over $60,000 or over $4,000 each month.

How did Mr Today end up with $114,702? Mr Today saved $50 per week, each week for ten years, then let the magic of compounding interest do the rest. It’s deadly dull but as we said it works. Could you do the same thing?

Like a lot of things in life, there is always a cost in putting something off until tomorrow.

If you would like more information on investing, please contact us at wealthadvisors@plus1group.com.au or call 03 5833 3000.

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