Time Marches On

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“Intensity is the strategy - Shaan Puri

Time Marches On

Today we are going to take a deeper look at this weird thing we call time.

In case you haven’t realized, this is arguably the most important variable in the compound interest equation (no this isn’t going to be like your economics class).

The most common problem when talking about investing is the “that takes too long” and the “who wants to wait 30 years” crowd.

My answer to this is you might as well invest because time is going to pass whether you choose to invest or not buddy.

Let’s keep digging deeper 🤝 

Common Excuses

It is said all the time, and you have likely heard it all as well or maybe thought about making these excuses yourself.

Everything from “who wants to wait that long” to “screw this, start a business and get rich.” To show you a few examples of what we are talking about.

These people aren’t completely wrong. Investing does take time, and playing the waiting game is a massive part of being a successful investor. You definitely won’t get rich overnight buying the S&P 500 every month (no offense VOO).

The mistake is using this as a legitimate excuse not to invest. That’s what doesn’t make any sense and here is why.

Running Clock

The part these folks are missing is that the clock doesn’t stop ticking just because you think 30 years is a long time. I’m only 25, but let me tell ya, that clock ticks fast and it doesn’t wait for anyone.

When it comes to investing, every one of those ticks is literally costing you money in retirement.

Think of a baseball game.

The team has nine innings to score as many points as possible before the final out in the bottom of the ninth. There are only nine chances for those runners to cross home plate. Each inning that passes without a run reduces the odds of having a high-score game.

Sure, a team can jack two grand slams in the 9th inning, or have a buddy fun day on a meatball pitcher and score a ton of runs late, but this isn’t common. The more reliable strategy is to bring a couple of runs across each inning.

One’s investments are no different. Each year that passes by is an inning where no runs were scored.

The game is going to be played, whether you start scoring or not.

Finding Your Lane

The other part of investing that plays into this is the misconception that you have to sacrifice everything for your precious portfolio, or completely ignore investing.

Let me let you in on a little secret, come on get closer…

*Whispers you can do both 🤯 

The road to financial freedom isn’t a single-lane backroad through the middle of nowhere. There are multiple lanes one can use. Your 9-5 job, building a full-on business, investing for growth, having a small side hustle, buying rental properties, investing for income, etc. The cool thing about the investing lane is it can be driven on autopilot.

Nowadays thanks to having supercomputers in the palm of your hand one can set up a brokerage account, link their bank, turn on auto contributions, select a good ETF/index fund, and not have to look at their investments for months at a time.

That means you can put investing on cruise control while you drive like Dale Earnhardt through the other lanes.

What A Year Costs You

Now that you get my point. Here is a short numbers example to back this up.

We are going to assume a $10,000 initial investment, a $500 per month contribution, a timeline of 30 years, and an annual return rate of 8%.

Doing this for the full 30 years would result in $834,702.

What happens though if you wait just one year to start? Your portfolio would only grow to $766,872. In basic terms, $67,830 in lost growth at the end of 30 years. That’s a year of work for the average American.

Let’s say you are going to wait two years, but oops it ends up being another five before you start.

Well my friend, that delay just cost you $292,491 in potential growth.

You can run this example with any contribution and any return. Here is a link to the website I used to run these numbers.

Conclusion

Are there assumptions with examples like this? Of course. There are also plenty of assumptions being made if you choose to ignore investing and rely on yourself to build a business or hit the lottery.

The point of this piece is to illustrate that investing is passive and can be done in the background. It doesn’t demand a ton of attention, and who doesn’t want a couple extra million laying around in 30 years?!

Share this with someone who needs a little encouragement and see if you can get them to merge into the investing lane.

Either way, the miles are flying by, and the innings are being played, because time marches on. ~ Cade

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Nothing in this email is intended to serve as financial advice. Do your own research. Thanks for reading, if you have any questions, comments, suggestions, etc. about the email don’t hesitate to send me a reply.