The 3 main reasons to ‘Start Saving Early’, are:
Albert Einstein considered ‘Compound Growth - The Eight Wonder of the World’. He also added - ‘He who understands it, earns it. He who doesn’t, pays it.'
The simplest way to illustrate this is with an example.
In the table above, you can see that:
Take advantage of compound growth, Start saving and investing today.
Imagine you have 10 years till your child turns 18. Assuming you need USD 100,000 for their college education at the age of 18, you have to save USD 10,000 every year.
But you decide to start saving 2 years later, you now have to save USD 12,500 to accumulate the same USD 100,000 in the remaining 8 years, till your child turns 18.
The earlier you start saving, the easier it gets.
Let’s consider one of the major milestones of ‘Securing Your Child’s College Education Fees’. If your child is due to attend university this year, forget about getting any discount.
In fact if you take a personal loan to fund any shortfalls between the money you have, and what is needed to pay the fees, you will end up paying more than 100% of the fees, than if you had cash. Remember – personal loans are not without costs.
Your money needs time to grow. Let’s say that you start saving when your child is born. You are now giving your money 18 years to grow.
The earlier you start saving, the higher the discount you will get on your milestone expenses.
Amit is an Independent Financial Advisor, based in Dubai since 1997. He is part of the prestigious ‘Million Dollar Round Table’ (MDRT), which is an elite club of the best financial advisors worldwide. He has authored the ‘6-Step Financial Success Guide’, and the book ‘Creating, Preserving, Distributing Wealth’. He helps business owners and professionals ‘Create A Second Income’ through investments.
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