There is one thing we can’t get more of, and that’s time. Believe it or not, time happens to be one of the single largest contributors to wealth.
By investing early – seeds become trees.
You may have heard from your grandpa or mother how “if I knew then, what I know now, I’d of started saving much sooner!” You see, wisdom and experience come to us as we age. Those of us that are ahead of the curve and stick to a simple plan of continually reinvesting will reap big rewards over time.
If you are brand new to investing, make sure you have an emergency fund first. The emergency fund is the foundation of personal finance.
Just Invest $200 a Month
Growing up in a small town in Louisiana, I was a little different in that I had a passion for investing. It’s not that I knew anything or was special, it’s just that early on I’d heard from 2 people (that I assumed reliable) how “if you would just invest $200 a month into stocks you can retire.”
The first person to tell me this was my grandfather. He was no millionaire. He just knew the power of compounding. He planted these seeds into my brain when I was about 5 years old. God only knows why I remember this.
Fast forward a few years to my senior year in HS, and there was this gentleman from Edward Jones who stood in front of all of my classmates (in the lunchroom cafeteria) proclaiming, “if each of you would just invest $200 a month into stocks you can become a millionaire.”
After realizing that I’d heard this message twice now, I took it to heart. As a teenager ready to take on the world, my goal from that day forward was to retire as a millionaire.
Seeds Become Trees
As I’ve gotten older, I’ve kept up my end of the bargain by continually reinvesting throughout my career. It’s both a passion of mine and a hobby. That’s the reason for Personal Finance Kid – getting ahead in life is really about making solid choices that have a positive impact down the road. If I’m gonna preach it, I better lead by example.
If you are more advanced in investing, you can check out my other website that focuses on picking outlier stocks. Repetition is the key to success in anything and this blog post, Repeating Success, tells that story very well.
The key to success in anything is consistency. Having a game plan is part 1 and sticking to it is part 2. Most of us want to save money and invest. Most of us know we should save more. But, sticking to the plan is the hard part.
I plan to show my kids the following chart which I made at investor.gov. It shows the growth in value of investing just $200 each month for 40 years. This graph assumes your investment compounds at 10% annually because that’s the historical return for the stock market going back decades.
So, take it from me that it is true that investing just $200 a month can lead to you retiring with a million bucks. Before you say “I can’t afford to invest”, realize that you can’t afford not to invest.
Seeds become trees:
The bottom line is this…if you want to win at investing, be consistent. Start out small and learn the power of compounding. Years from now, I’ll bet that you’ll see that seeds become trees.
Warren Buffett said it best, “Someone is sitting in the shade today because someone planted a tree a long time ago.”
Now, go plant some seeds!