When I was studying finance, I had a professor who would repeatedly lecture the class on the importance of time and not procrastinating when it came to investing. I thought today, I will share that lesson with you. So what is the cost of Procrastination? Let’s take a look. I am going to use an example of a 35 year old who has accumulated $50,000, is earning 4.5% across all his accounts, and wants to retire at age 65. Let’s also assume when this 35 year old starts saving, they will save $3,000 a year.
If this 35 year old started saving today they would enter retirement with $381,523 in that account. The cost of waiting just 10 years to start saving is a $92,908 difference!
This shows how valuable time is when you have compounding interest. It also shows how much waiting can cost you when you reach retirement. If you haven’t already, start putting a plan together and implement what you can today!