Time is your Best Friend when Investing

1. If somebody invested $10,000 in the US market 25 years ago, what would it be worth today?
       If a person invested $10,000 in the S&P 25 years ago, their money would be worth about $102,000      today.

2. What annual rate of return would they have earned during the past 25 years?

3. If somebody invested $2,000 per year at this rate of return, from the time they were 18 until they were 65, how much money would they have?

4. If somebody invested $10,000 per year at this rate of return from the time they were 40 until they were 65, how much money would they have?

Commentary:

     Overall, these examples show us how important it is to invest early.  No matter how much money you invest, you make more money if you invest early.  If you invest early, you end up not having to put as much money in, yet still earning more money overall.  

Links:

How to calculate the rate of exchange:

http://www.moneychimp.com/calculator/compound_interest_calculator.htm

How to find the growth of the S&P 500:

http://quote.morningstar.com/fund/chart.aspx?t=VFINX&region=USA&culture=en-US

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