Here's a good example of why you should start saving sooner rather than later.
Tatay Ruby and Toklang are both in Vancouver as immigrants. Both have worked and invested their earnings. The difference, however, Tatay Ruby (now 65) has set up an Individual Retirement Account (IRA) when he was 20 and contributed 2,000 per year until he was 40. Toklang didn't start her IRA until she was 40 but continues to put in 2,000 per year. Both of them earn 10 percent per year. Who do you think will have more money in the long run?
Do the math, and you'll find that Tatay Ruby has almost Php1.25 million, and Toklang, who puts in 25 percent more, by her 65th year will have less than Php200,000. That's the miracle of compounding.
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