Investment Comparison: Early vs. Late Start

Can you guess which investment strategy will yield more by the age of 65? Let's compare two scenarios with an 8% annual return rate:

Scenario 1: Invest $1200 Annually from Age 20 to 30

In this scenario, you start investing $100 every month at the age of 20 and stop at the age of 30. You then let your investments grow without adding any more contributions until you retire at 65.

Scenario 2: Invest $1200 Annually from Age 30 to 65

In this scenario, you start investing $100 every month at the age of 30 and continue to do so until you retire at 65.

Investment Growth Comparison

Impact of Different Annual Return Rates at Age 65

The investment rate will be heavily impacting our results, the lower the investment rate is, the smaller the head start advantage of the early investment will have.

Impact of Different Monthly Investment Amounts

Conclusion

The power of compounding interest makes a significant difference in investment growth. Starting early, even with smaller contributions, can often lead to greater overall returns compared to starting later with higher contributions.