If a picture is worth a thousand words, then how much is a chart worth?
If you are a younger person and you are trying to decide if you want to start investing money, check out this chart to give yourself the necessary motivation to get started investing.
The chart below assumes you get an average annual rate of return of 10%.
- Speedy Steve starts investing at 20 years old and invests $2,000 a year for eight years. He retires with $855,504.
- Savvy Stuart starts investing at 30 years old and invests $2,500 a year for 35 years. He retires with $745,317.
- Slow Susan starts investing at 40 years old and invests $7,500 a year for 25 years. She retires with $811,363.
- Slumbering Samantha starts investing at 50 years old and invests $25,000 a year for 15 years. She retires with $873,743.
| Age | Speedy Steve @ 20 | Savvy Stuart @30 | Slow Susan @ 40 | Slumbering Samantha @ 50 | ||||
| Invested | Value | Invested | Value | Invested | Value | Invested | Value | |
| 20 | $ 2,000 | $ 2,200 | ||||||
| 21 | $ 2,000 | $ 4,620 | ||||||
| 22 | $ 2,000 | $ 7,282 | ||||||
| 23 | $ 2,000 | $ 10,210 | ||||||
| 24 | $ 2,000 | $ 13,431 | ||||||
| 25 | $ 2,000 | $ 16,974 | ||||||
| 26 | $ 2,000 | $ 20,872 | ||||||
| 27 | $ 2,000 | $ 25,159 | ||||||
| 28 | $ 27,675 | |||||||
| 29 | $ 30,442 | |||||||
| 30 | $ 33,487 | $ 2,500 | $ 2,750 | |||||
| 31 | $ 36,835 | $ 2,500 | $ 5,775 | |||||
| 32 | $ 40,519 | $ 2,500 | $ 9,103 | |||||
| 33 | $ 44,571 | $ 2,500 | $ 12,763 | |||||
| 34 | $ 49,028 | $ 2,500 | $ 16,789 | |||||
| 35 | $ 53,930 | $ 2,500 | $ 21,218 | |||||
| 36 | $ 59,323 | $ 2,500 | $ 26,090 | |||||
| 37 | $ 65,256 | $ 2,500 | $ 31,449 | |||||
| 38 | $ 71,781 | $ 2,500 | $ 37,344 | |||||
| 39 | $ 78,960 | $ 2,500 | $ 43,828 | |||||
| 40 | $ 86,856 | $ 2,500 | $ 50,961 | $ 7,500 | $ 8,250 | |||
| 41 | $ 95,541 | $ 2,500 | $ 58,807 | $ 7,500 | $ 17,325 | |||
| 42 | $ 105,095 | $ 2,500 | $ 67,437 | $ 7,500 | $ 27,308 | |||
| 43 | $ 115,605 | $ 2,500 | $ 76,931 | $ 7,500 | $ 38,288 | |||
| 44 | $ 127,165 | $ 2,500 | $ 87,374 | $ 7,500 | $ 50,367 | |||
| 45 | $ 139,882 | $ 2,500 | $ 98,862 | $ 7,500 | $ 63,654 | |||
| 46 | $ 153,870 | $ 2,500 | $ 111,498 | $ 7,500 | $ 78,269 | |||
| 47 | $ 169,257 | $ 2,500 | $ 125,398 | $ 7,500 | $ 94,346 | |||
| 48 | $ 186,183 | $ 2,500 | $ 140,687 | $ 7,500 | $ 112,031 | |||
| 49 | $ 204,801 | $ 2,500 | $ 157,506 | $ 7,500 | $ 131,484 | |||
| 50 | $ 225,281 | $ 2,500 | $ 176,007 | $ 7,500 | $ 152,882 | $ 25,000 | $ 27,500 | |
| 51 | $ 247,809 | $ 2,500 | $ 196,358 | $ 7,500 | $ 176,420 | $ 25,000 | $ 57,750 | |
| 52 | $ 272,590 | $ 2,500 | $ 218,743 | $ 7,500 | $ 202,312 | $ 25,000 | $ 91,025 | |
| 53 | $ 299,849 | $ 2,500 | $ 243,368 | $ 7,500 | $ 230,794 | $ 25,000 | $ 127,628 | |
| 54 | $ 329,834 | $ 2,500 | $ 270,454 | $ 7,500 | $ 262,123 | $ 25,000 | $ 167,890 | |
| 55 | $ 362,817 | $ 2,500 | $ 300,250 | $ 7,500 | $ 296,585 | $ 25,000 | $ 212,179 | |
| 56 | $ 399,099 | $ 2,500 | $ 333,025 | $ 7,500 | $ 334,494 | $ 25,000 | $ 260,897 | |
| 57 | $ 439,009 | $ 2,500 | $ 369,077 | $ 7,500 | $ 376,193 | $ 25,000 | $ 314,487 | |
| 58 | $ 482,910 | $ 2,500 | $ 408,735 | $ 7,500 | $ 422,062 | $ 25,000 | $ 373,436 | |
| 59 | $ 531,201 | $ 2,500 | $ 452,359 | $ 7,500 | $ 472,519 | $ 25,000 | $ 438,279 | |
| 60 | $ 584,321 | $ 2,500 | $ 500,344 | $ 7,500 | $ 528,021 | $ 25,000 | $ 509,607 | |
| 61 | $ 642,753 | $ 2,500 | $ 553,129 | $ 7,500 | $ 589,073 | $ 25,000 | $ 588,068 | |
| 62 | $ 707,028 | $ 2,500 | $ 611,192 | $ 7,500 | $ 656,230 | $ 25,000 | $ 674,375 | |
| 63 | $ 777,731 | $ 2,500 | $ 675,061 | $ 7,500 | $ 730,103 | $ 25,000 | $ 769,312 | |
| 64 | $ 855,504 | $ 2,500 | $ 745,317 | $ 7,500 | $ 811,363 | $ 25,000 | $ 873,743 | |
Even though they all retire with pretty close to the same amount, here is how much each one actually contributed:
How many more days do you plan to wait before you start investing?
I always worked for small New Mexico daily newspapers, which never paid much and no overtime (but wanted you to work around-the-clock, being on-call through the night and other such things … this was in the 1970s and 1980s and probably longer after that…). I felt I simply could not save because I did not make enough money to save… much less “invest.”
However, in my older years, I would give anything to have that savings account that had $5 in it from every paycheck I ever received.
I think that could have been do-able. My father was a great saver, but never taught my sister or I how to save as he did, or the rewards of compounding interest and how … over time (we’re talking 10, 20, 30, 40 years ….) your money can double, triple and beyond, as your chart shows!
I once told a young, brand new reporter about my desires for that savings account that had $5 in it from every paycheck I ever received, and his response was, “I can’t save that — that’s what I live on until the next paycheck.”
But that’s really not the case, once you get the habit.
Once you get the habit, it’s the next $5 up that you’re now going to live on, and you’re going to find more and more ways to save another $5 in the way you live and spend your money, which includes such things as buying a different brand of dish detergent, or a different brand of clothes detergent. Becoming more organized in when you do your laundry to get the most bang from your buck. You might find it easier to do less laundry at a time, to go to the laundromat once a week with fewer clothes and have fewer “loads” to pay for, than waiting until you have nothing left to wear and having to shell out $10 or more for laundry. Buying food items when there’s a good sale. Buying more store brand or generic items, instead of name brand foods. There’s been research done and blind-folded taste tests which have proven that many store brands taste as good or even significantly better than name brands in frozen prepared foods.
Here’s another helpful hint in saving money on food: http://www.angelfoodministries.com, a ministry which (in certain areas, I happen to live in one …) offers food at a great cost savings, particularly for families.
This is how we learn to save and how to have the money to “invest.”
Right now, I myself am thinking about how I can save more money…
I’ll get off (or on….) my soapbox now… (depends on whether I’m going the laundry or not…)
This is kind of a kick in the pants for me (in a positive way). It really helps to see the info. in a chart form. I am just starting to build up my retirement savings. It’s hard to think about retirement when there are so many other, more immediate concerns, like student loans and paying the bills. I think they key is trying to find a balance between all of the different financial goals – easier said than done!
Marie,
I’m glad you found this post to be motivational. With investing time is always your best friend.
Thanks for your comment.
I also wish I had saved more in my 20s and 30s. Thank you for a great chart which I printed to share with my grandchildren, ages 16, 13 and 9
Pam,
I think it is a great idea to pass this information along to your grandkids!