Why Investing Early is Important

The earlier you begin saving and investing for your retirement, the greater for potential gain and the more time you will have for potential growth.  By investing early and staying invested, you will be able to take advantage of compound earnings.  For some of you, you may be wondering what is compound earnings.  This is basically the concept of making money with your money.  Compounding is when the money you earn from your investments is reinvested and has the potential to earn even more.

So basically, think it about it this way! The more time, the more growth potential.

If you saved $50 a month for 10 years and never invested it or earned any interest on it, you’d have $6,000 after 10 years. But if you invested $50 a month for 10 years and earned 8% each year on your investment, you would end up with about $9,150. In other words, you’d have 50% more money. (8% is used as an example only and is in no way a guarantee of performance).

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Catherine Magaña is a Certified Financial Planner in Carlsbad California.

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