Invest Early And Retire Early For Financial Independence

Power Of Investing Sooner To Be Financially Free

This article elaborates on the benefits of investing early. I highly encourage everyone to attain financial freedom as early as possible in their life. And it is possible if we start investing early.

The earlier we start investing, the longer our money can grow and the earlier we can retire.

What really matters is the amount we invest and the duration we invest our money for.

We can invest our money in high-paying interest-rate savings accounts, real estate, ETFs/stocks/funds, pension pot, crypto, and/or fixed-income assets like bonds as your investment choices depend on multiple factors such as the risk you are willing to take, age, and other commitments. But the key is to start investing early.

Note: Always seek professional financial advice when investing your money because not all investments suit everyone. Please read the disclaimer.

Calculations

The calculations assume that the investment grows at 5% on a yearly basis.

Note: S&P 500, which is occasionally referred to as the overall market, has an average long-term return of around 10% yearly so 5% growth is a conservative return rate. The investments can grow or go lower in value.

I’ll present 3 sets of calculations: Investing £100, £1000, and £3000 monthly for 10, 15, and 30 years.

In the calculations below:

• Monthly Investment: How much will we invest every month
• For: Duration of how long we will keep investing
• Total Investment: Total value of the investment after the duration
• You Invested: The amount we invested in total
• Gained: Investment gained due to compounding and growth

The calculation doesn’t take tax, inflation and other economic factors into account. Its purpose is to illustrate the benefits of investing early.

1. Let’s start with investing £100 monthly for 10 years

2. How about investing £1000 monthly for 10 years

3. Finally, investing £3000 monthly for 10 years

Now, we’ll repeat the same exercise but we’ll start investing early

Let’s start by investing £100 monthly for 15 years. We’ll keep the amounts the same

Let’s start by investing £1000 monthly for 15 years

Let’s start by investing £3000 monthly for 15 years

Let’s now start investing for over 30 years

Let’s start by investing £100 monthly for 30 years

Let’s start by investing £1000 monthly for 30 years

How about investing £3000 monthly for 30 years

Summary

If we start investing £100 monthly for 10 years, we’ll end up having £15,499 in our savings pot whereas if we start investing £3000 monthly for 30 years, we’ll have our investment pot of 2,456,093 (assuming the investment grows at 5% yearly).

The investments can go up or down in value but overall, we’ve experienced that the overall S&P 500 market has grown by 10% yearly on average.

I recommend everyone to start investing early to retire early and for financial independence.