Tool 03 — For young investors
The 8th Wonder
See what starting now does for you. The cost of waiting five or ten years to invest is almost always larger than your eventual contributions.
“Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it.”
— Warren Buffett
Inputs
Don't know your numbers?
Use the US median for someone your age. Median income for 22-24 is roughly $42K, and a 15% savings rate is the standard recommendation.
When on, the chart adds a Real (today's dollars) line so you see what the final balance is actually worth.
Final balance at 62
$1,632,264
$500,382 in today's dollars
You contribute
$241,000
over 40 years
Compound earnings
$1,391,264
577% of contributions
Growth trajectory
Age 22 to 62
The cost of waiting
Wait 5 years
$546,195
less at age 62
Wait 10 years
$917,926
less at age 62
Same monthly contribution, same return assumption. The only difference is when you start. Time is the variable that does almost all the work.