💸Investing is an essential part of any financial plan. Unfortunately, many people don’t invest their savings.
This can be crippling to your long-term financial health💡. To better understand why, let’s take a look at some numbers so you can see exactly what you lose by not investing.
You Will Need Funds in Retirement and ideally, you need a retirement fund separate from your pension(s). The Cost of Not Investing £20 Per Month
If you were to invest £20 every month and earn 10 percent—roughly the annual return of the S&P 500 over time—you would have £26,537 at the end of 25 years.
The cost of not investing £20 per month over the course of your career is over £20,000! This isn’t chump change. Imagine how far £20,000 goes in retirement. For many people, that is half a year ’s retirement income. 💰
If you put your money in a savings account, you are losing out compared to investing in the markets. The best savings account interest rates today are around 1%; at the end of 25 years saving £20 per month you would have £6,819.08. Incredibly short of what you’d get by investing in the markets.
The Cost of Not Investing Grows With Your Ability to Save.Odds are you spend at least £70 per month on something you don’t really need.📱🎧 If you invest £70 per month, you would end 25 years of investing with £92,878—again, assuming an average annual return of 10% per year, compounded monthly.
Of course, inflation 🚀means that £92,878 won’t go nearly as far in 25 years as it does today. So let’s take it even further. If you were to invest £211 per month for 25 years at the average return of the S&P 500, you would have £608,131.98.
Now we’re talking! This is still below what many people need to retire, but it puts you well on the way.
Don’t Lose Out by Ignoring the Power of Investing
Even Warren Buffet started with his first investment.
You can come up with a list of reasons not to invest, but I can give you 20,000 reasons(okay, maybe not 20,000) you should start investing at least £20 per month—and even more reasons to invest even more.✈ Every day you wait to invest, you are losing out. Stop losing and let your money work for you.