INVESTING 101
Lesson 2: Trust in Time
The secret to building wealth is simple — it takes time, and a lot of it
One of the most important things about investing in your 20s and 30s is simply being in the game. We learnt from Lesson 1 that simply putting your money in a savings account for decades is one of the worst things you can do for your future. We need to get your money working for you so you can enjoy it later! But first here’s Lesson 2, which is all about time.
Time is your best friend — not your BFF that used to live next door and urged you to buy Bitcoin at its highest point! I’m not here to advocate a short-term craze or day trading, because those are not reliable ways to build wealth and achieve financial stability. I’m here with the boring approach! The one that will take 20, 30, 40 years, but you’ll thank me for it then :)
Building wealth takes time — simple as that. And it’s important you listen to Lesson 1 and start now. I’m going to prove it to you with a chart — I aim to keep these graphics easy to understand. I wish I had started investing seriously as soon as I earned my first full-time paycheck, but I’m hoping some of you reading will get a head start by investing early into your twenties.
The graph below shows that if you put $10,000 into a medium risk investment account (I’ll explain this later) when you are 25 years old and didn’t do anything for 40 years you would have turned that $10,000 into almost $150,000. If you had waited until you were 35 years old to do that same thing, you would have only turned that same amount into just over $75,000 — that’s half as much as the 25-year-old who started early…yikes!
That was a lot of numbers in a very short paragraph. But hopefully, you get the point.
And that’s a wrap on my lesson about time. It’s again a short and simple lesson to grasp — use time to your advantage. Start early and over the long term, you’ll be in a great place financially. Investing doesn’t have to be hard or scary, and that’s what I’m aiming to do with my Investing 101 series. Keep tuning in for more lessons on my principles to good investing. Next up we have Lesson 3 on Patience.
Now stop wasting time and go out there and begin investing with the knowledge and confidence you’ve gained from reading these posts!
