Being an early bird isn’t just important for getting the best worms. It’s also a key to success for your financial future. The sooner you start saving in an invested account, the more COMPOUND INTEREST will work to grow your nest egg.
Compounding is when earnings are generated, not only on your initial investment, but also on all previously accumulated earnings – resulting in a “snowball” effect where interest builds on top of interest. Think of every dollar you save working hard to earn more money for you. By understanding and using the power of compounding, you can make sure your money works just as hard as you do.
Consider the comparison below. Even though Alex contributes for more years and puts in three times his own money, the fact that Bonnie starts earlier and allows her account to grow for a longer period, compounding interest results in more money for retirement.
It’s never too late to take action. Consider putting more money to work for your future through contributions to an invested account like a 457 or IRA.