On Women and Money This Week, we talked about loving to save money. What the HUGE upside is when you can put a little bit away, and LEAVE it there over time.
Here was our main example:-
Evelyn Early vs. Linda Late.
Evelyn saves $2,000 a year for 10 years and leaves it in an interest bearing account for the next 30 years. She doesn’t touch it, she doesn’t look at it, she lives her life without thinking about.
Linda does not save those first 10 years. She enjoys her life and spends as she wants to. Suddenly, 10 years later, she realizes she better do something or she’ll not be able to retire so she saves the same $2,000 a year, but for the next 30 years.
30 years go by, and what do you think the numbers look like. After all, Linda has saved 3x longer than Evelyn, and put aside $60K where Evelyn only put aside $40K, right?
At an average rate of return, Evelyn is now looking at a bank balance of $611,817 and Linda is seeing only $361,887 in hers.
Yup! WOW! That’s 59% MORE for starting early, putting away less and NOT TOUCHING IT!!
And, of course, there was more….