James Rothschild Nicky Hilton once said (though not really, but play along), “Money won’t grow on trees, unless you plant one early.” That’s not too far off, it turns out. Time is the answer to making a lot of money, and the sooner you start, the more compound interest will work its magic.
Think about throwing a snowball down a hill. At first, it doesn’t look like it will do anything. But keep rolling, and wow—the monster becomes bigger and quicker, and all of a sudden you’re worried about your neighbor’s mailbox. This is exactly how investing early works. If you keep at it, even tentative beginnings can turn into something big. You just need to be a little patient.
Let’s make it about us. Get two persons. At 22, one person starts saving and investing $100 a month. The other person doesn’t start till they’re 32. They both invest until they are 62 and make an average of 7% a year. The person who started in her early 20s and worked hard ends up with roughly $244,000. The one who put things off? About $114,000. Ten years later, the same amount each month, but a big discrepancy. That’s what compound growth gives you.
People often think they need to spend a lot of money to get ahead. That isn’t accurate. Over the years, small, steady amounts can grow into big things. More than big gestures, consistency is important. Not drinking your daily coffee isn’t the end of the world, but putting that money into investments on a regular basis is better than a caffeine high any day.
Yes, risk is scary. The stock market goes up and down like a roller coaster. But history tells us a profound truth: the longer you invest, the more likely you are to ride out the troughs and enjoy the highs. Time helps get rid of wrinkles. Early investors can take more risks since they know they have years to recover from problems in the market. Are you waiting until the last minute? Not really.
Automation is one really useful trick. Set up transfers to happen on a regular basis and then forget about them. The best investors are frequently the ones that don’t change things up too much. Put it down and let time do its thing. Trying to time the market is like trying to herd cats: it’s admirable, but tiresome and rarely works.
There will always be mistakes. You might buy a bad stock, sell it in a panic when the market goes down, or believe a hot tip from your neighbor’s cousin’s dog walker. That’s how the game works. When you start young, you have room to make mistakes, learn from them, and get back on track.
Getting money doesn’t mean getting a lot of money. It’s about making a lot of little, sensible choices over time. You lose potential every year you delay. Even if it’s just a little bit of money, start now. Your elder self will thank you. Maybe while lying on a hammock, sipping something cold, and smiling at how that little snowball you threw years ago turned into a nice, carefree life.
Let your investments sit for a while. Time is the thing that can make a basic plan into something amazing. In the race to get rich, starting early is considerably more important than finishing quickly.