Some years ago I was told of a middle-aged doctor who went to see a financial planner for the first time. The doctor said, “I know the first thing you are going to tell me is that I am crazy for having $250,000 in a savings account!” The financial planner replied, “No, I don’t think you’re crazy. Most people don’t have $250,000 ANYWHERE!”
One of the keys to gaining financial independence (and that number is different for everyone) is to start saving/investing as early as you can and keep doing it. So how much does it cost to wait? Here’s an example: If you were to invest $2,000 a year for 10 years, earned 6% on average, and then let the balance continue to grow for another 20 years, the balance after 30 years would be $84,545.
If you didn’t start until 10 years later, but invested $2,000 each year for 20 years (twice as much), and earned the same 6% average, your balance would be only $73,571—about $11,000 less!
Unfortunately, too many people find things that they “need” and, subsequently, never have anything left over to save or invest. They don’t have savings accounts; they have deferred spending accounts. It is never how much you make; it is how much you KEEP!
