Two Investors, Different Timelines

A brief visual example of the power of starting early

We covered this as part of an earlier post, but it’s such a valuable lesson that it deserves the spotlight.

Two investors put money into an index fund that returns 9% annually.

Investor A starts at 18 and invests $1,000 per year for 8 years and then stops.

Investor B starts at 26 and invests $1,000 per year for 40 years.

Who do you think ends up with more at age 66?

Investor A winds up with about $9,300 more, despite investing just $8,000 in total — compared with Investor B, who invested $40,000.