Laboring for every dollar you earn is one thing. Getting it by investing wisely is another. There’s almost certainly less labor involved. Many people think smart investing is the most reliable way to get rich.

One excellent way to do this is to start saving early! If you are able to put aside $20,000 by the time you’re 35 years of age, you’ll have $142,000 by the time you are 65 (at a 7% return). But if you wait to invest $20,000 when you are 45, you’ll only have $81,000 when you are 65 (also at a 7% return). Delaying ten years costs you almost half of what you would otherwise have at retirement. The results are even worse, even heartbreaking, if you delay until 55 (see chart below).

Invest $20,000 at Different Ages
(Based on 7% return per year)

Age at Initial Investment Return at age 65
35 $142,000.00
45 $ 81,000.00
55 $ 40,000.00

When the amount of money invested (at any age) is more,
the return is proportionately greater.

Most financial advisers suggest maxing out any tax advantaged retirement plan preferentially before saving in taxed accounts. This means even greater return on your money because it is not taxed during the accumulation phase, but when it is taken out.

Essentially, the more you have to invest plus the longer you have to do it, the more reward you will glean. It’s delaying gratification now for a greater reward later.

About the Author:

Shirley M. Mueller turned every doctor’s fear – inability to invest his or her hard earned money wisely – into her greatest passion. While practicing medicine, she handled seven family investment accounts. When she retired from medicine in 1995, she worked for seven years in the investment industry. Now, she writes regularly for Physician’s Financial News, a money management internet publication directed at doctors. Dr. Mueller also educates, both one on one and publicly, about how to effectively self-invest using a simple and effective three-step approach. Recently she gave lectures regarding this topic at Indiana/Purdue University. Mueller specializes in client-managed investment portfolios for which she provides unbiased information. She is not associated with a firm for whom she has to promote a party line. Her fee is hourly, not a percentage of assets.

Website: http://www.mymoneymd.com/ ^[1]

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