Ways You'€™re Losing Money Without Realising It


Here at Monty we talk about how to get better at saving money – eat less avocado, buy your bbq in October, book those flights in January. That kind of discipline requires a lot of will power which is why it's critical to ensure you’re not actually losing any of that.

As our good friend Warren would say, "Someone's sitting in the shade today because someone planted a tree a long time ago." Failing to invest now your savings now is essentially forgoing passive income, the amount you could have made only grows as you age... (gracefully of course.)  Rather, it’s the most surefire way to restrict your financial wellbeing.

Not only is your money worth less over time thanks to inflation, but those who do invest in their 20s and 30s will be way better off. Luckily, if you’re on the young side, you already have one of the best things going for you: time. Time is your best friend when it comes to investing. And if you’re worried you’re already late to the game, you're not alone, Most Americans are not prepared for retirement or even an emergency. However ‘now’ is still better than ‘never’!

The charts below, from personal finance site NerdWallet, will make you want to start saving right away. Each one shows how much money you'd need to set aside to have $1 million saved by the time you're 67. It assumes you start with zero dollars and also assumes various average annual investment returns.

The charts looks significantly different depending on what age you start saving.Here's what the path to €1 million looks like if you start saving at age 25:



If you start saving at age 30, things get a little trickier...


The longer you wait to start saving, the harder it will be to reach your goals. The next chart shows how much of each biweekly paycheck you'd need to set aside to have $1 million if you start at age 40 with zero dollars invested. As you can see, starting early is incredibly advantageous. And it's all thanks to one simple principle: compound interest.