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You can't quit work until your money goes to work for you

  • Published
  • By Lt. Col. James Barber
  • 437th Medical Support Squadron commander
Isn't it amazing how fast you can spend $50 today? Recently I spent $50 putting gas in my truck and buying two drinks. I dropped another $50 at a sports store for a T-shirt and some shorts. It went quick, and that happens every month.

However, did you know that had I invested that $50 each month, in 50 years I would have had $880,707 (assuming 10 percent rate of return) in the bank? If I increased that investment to $100 each month, the value soars to $1,761,413 in 50 years! Welcome to the world of paying yourself first and compounding interest. Fortunately, the above scenarios are very attainable given modest growth and a successful investment plan.

Starting an investment plan is a lot like starting a new running program. You hate to start it, but once you're comfortable, you wonder how you ever lived without it. The key to starting an investment program is easy -- start now. Although some people are successful in get-rich-quick schemes, time is your greatest asset in the long run. The time value of money is often underestimated and we wait until it's too late to use time as an advantage. Delaying even 10 years to start your plan in the above scenario decreases your final value by $1,118,365.

Another key to your investment plan is just as simple -- pay yourself first. Don't plan to invest what you have left at the end of the month. You'll never do it. Between the "must haves" and the "nice to haves" we exhaust our money. Instead, set up an allotment to have the money deposited in an investment account. It may be tough in the beginning, but you'll learn to live without it, and you can't miss money you never see.

Most of us don't start investment programs because we don't know where to start. We spend hours surfing information on our favorite college football team, but won't spend two seconds researching where to put our money.

I must confess, I'm a "finance geek," but not everyone enjoys the sometimes mundane task of investing. Fortunately, there are several options to choose from and most are only a mouse click away. Deciphering where to put your money can seem daunting, but it is actually fairly simple if you take advantage of all the available resources.

Fifty years seems like light-years away, and for many of us it is. I bet when you were 10 years old, turning 30 was only a fleeting thought. To most, $50 is a lot of money to invest for something we can't enjoy until later in life. It would be a safe guess that if you ask your grandparents one thing they would change if they could go back in time, it would be saving more money earlier in life.

Time is the great multiplier in saving and once it's gone, you can't get it back. Life happens, and you wake up one day wondering where all the time went. A good investment plan started early and with automatic deposits is a great way to achieve your future life goals. Besides, you can't quit work until your money goes to work for you.