When you think about the span of your life, you can easily break it up into three parts.

Investing Principle #2 - Start Investing As Early As You Can

We spend a third of our lives growing up, another third maturing into various responsibilities and the final third of our lives in retirement.

Given that Singapore has one of the world’s longest life expectancy at 84.8 years, it is not surprising that you will spend 25-30 years in retirement, almost as long as you have worked.

Start Growing Your Money As Soon As You Can

With this many years in retirement, having enough savings to last you does not happen by accident. It requires you to start growing your money as soon as you can.

Consider two investors who can get a 6.5% p.a. rate of return:

Investing Principle #2 - Start Investing As Early As You Can

  • Person A started investing early, at 25 years old, for only 10 years.

Investing Principle #2 - Start Investing As Early As You Can

  • Person B then starts investing slightly later, at 35 years old. In order for Person B to achieve the same result as Person A, he has to invest for 30 years.

Time Is Money!

Imagine how much more the first investor will be able to accumulate if he had kept investing right up till retirement! Let’s have a look, shall we?

Investing Principle #2 - Start Investing As Early As You Can

Wouldn’t you say that time is indeed money?

“The best time to plant a tree is twenty years ago. The second best time is now.” – Chinese Proverb

This series is adapted from the book, 27 Principles Every Investor Should Know, written by Steven J. Atkinson. Read the rest of the principles:

Author: MoneyOwl’s Solutions Team

Cover image from Unsplash.

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