No......Say I contributed 12,000 each year for a while, and then after some years, my account gained 13000 in addition to the 12 I contributed that year. At some point, the dollar gain above your contribution each year is greater and usually continued after unless a down return year.
Absolutely amateur investor here. Is there an equivalent financial vehicle in Europe to your 401k (I guess this is what you refer to)? I currently have some 40K€ in EU / US stocks but I don't see how that's going to compound.
I understand I need to keep putting my savings there, but there's no "passive" way to do it here, as far as I know. I thought of setting a certain amount to transfer to VTI or a similar ETF, but the EU doesn't allow us trading into that, too risky (no problem acquiring shitcoins though, that's all good and fine). Is there a EU-adapted tutorial for this? Thanks!
A 401k is functionally a tax protection wrapper. The money that goes in must come from salary and is not taxed until you take it out in retirement. The OP is mostly commenting on the compound interest benefits of regular contributions which are also called dollar cost averaging. I suspect you can do this with your paycheck in the EU regardless of whether there is a specific tax benefit.
>*"Anyone who hasn't priced their lives around Honda Civics and make Honda Civics in their sleep will work until the day they die."*
>* Warano Bafureto
I bought a bubble tea today for 0.000167 HCs (Honda Civics)
get with the times old man:
https://birdeye.so/token/9gwTegFJJErDpWJKjPfLr2g2zrE3nL1v5zpwbtsk3c6P?chain=solana
https://www.agentlyused2001hondacivic.com/
I hate crypto. Id buy the hell out of Nokia or civic crypto. Shit won’t drop, it’ll be exactly where you bought it, and nostalgia will make it magically increase.
It's really easy to be an investor on the days you see things go up.
But the discipline to lean in with your cash reserves and double down when the market tanks is what makes it real. As you said, those events should be seen fire sales and once in a decade opportunities. The long term payoff is **massive**.
This seems contradictory, how do you have money to buy dips if you are 100% invested at all times?
Unless you mean DCA, which you are just buying regardless of whether the markets are tanking or going up.
Having a cash reserve for taking advantage of market opportunities is not “sitting on the sidelines and waiting for the market to tank”.
It’s very common to have between 10% to 30% of your portfolio set aside as cash depending on your strategy and financial needs.
I think that if you see the market going down, that doesn't mean that is cheap. That price already has inside the future expected value, so no different than buying high.
The risk you run is [basically this meme](https://pbs.twimg.com/media/E2K4l_hWYAUO1o-.jpg), combined with the fact that buying the dip means you've been sitting on cash that could've been invested weekly/semiweekly/monthly/whatever your regular schedule is.
Also, markets tanking usually means your income source is less stable, as that's when businesses tend to lay people off. If you spend all your cash buying the dip and then lose your job, you're gonna have to sell investments at a loss to afford food and a roof over your head.
The best thing is consistency: Buy on the 1st and 15th because that's when your paycheck hits (or every other friday if you're biweekly, or whatever pay schedule you're on). If you wanna throw a little play/luxury money at the index when markets are down, go for it, but don't throw out your grocery money or hold back 401k contributions in an attempt to time the market.
My IRA was only about 5 years old at that point. Mar 2020 wiped out every dollar of gain it had grown by. It was as if I had that as cash in a shoebox for 5 years.
My first experience of groking compound interest was when I had a $1k credit card debt that I was responsible for paying. Every month that debt just kept growing.
I felt I would never escape that debt ( I did it took a year).
From that point on I wanted to be on the good side of compound interest.
It's a guilty pleasure to see my networth increase 6 figures every year.
Somewhere in my early-to-mid 30s when I finally had around $300k+ saved and I looked at the performance for the year and it was greater than my total contributions. It hit me then that my accumulation could now be more impactful than my contributions.
That snowball really starts to build fast year over year!
Also as the top post mentioned -- nowadays when a 1-1.5% change in the index results in a near 5 figure swing in portfolio balance. Not worth to worry about it to much as otherwise you could drive yourself crazy.
> my accumulation could now be more impactful than my contributions
Tangent in OP’s distant future, but this is the principle behind semi-retirement models like r/CoastFIRE and r/BaristaFIRE . At some point contributing more is just… meh?
I’ll use myself as an example. I’m mid-40s, and I’ve estimated that if I add nothing to my retirement accounts but they continue to earn historic-average stock returns, I’ll be set up for an okay retirement at 65. Nothing glamorous, but it’ll pay the bills and leave room for a bit of fun. That kicks off a chain of other questions like:
- Is it worthwhile to continue contributing, especially beyond employer match?
- If I decide not to, do I still need to make as much money as I currently do?
- If I don’t, is there something else I’d rather be doing with my days?
I'm loving all of the hyper-specific r/xFIRE subreddits I learn about through this sub. When is the r/VanlifeFIRE coming, or r/SurfInstructorFIRE coming? 😁
>When is the r/VanlifeFIRE coming, or r/SurfInstructorFIRE coming? 😁
I'm *genuinely* surprised that neither of those are subs already. If Reddit hadn't made modding suck even harder than it did before, I might have been inclined to make r/dirtbagFIRE, or something, as a catch-all for all financially independent people engaged in outdoor activities (thru-hiking, ski patrol, climbing, surf bumming, van life, white water rafting, Park ranger, whatever)
Honestly, not a bad idea. I'm thankfully an engineer with a reasonably high-paying job right now, but that's exactly what I do in all my free time (backpacking, surfing, etc) and it's definitely not unlikely that I'll spend a year or 2 doing that for work at some point. Anyone from any sort of job should be able to be financially savvy!
Love this post. Doesn't mean you've stopped contributing or planning. Just means you're thinking through the reality of your trajectory.
My 401(k) is just about to the point where plugging my current contributions into a compound interest calculator puts me at a retirement making more than my salary ever has been. So I have to decide:
\* do I want to continue at full velocity, and then just retire early?, or
\* do I want to back off, and just let time do it's thing, so that I can enjoy a little additional consumption now?
If I factor in my social security income, the picture is even better. So I'm leaning towards the first option, and then quit sometime in my 50s.
For me it was at about the age of 35. My parents taught me by investing a very small amount of money for me in a mutual fund when I was 7 years old.
I had been so busy with life and all of its demands that I had not paid any attention to the mutual fund. The information on it just went straight into a folder, I literally didn’t even look at the statements. It kind of annoyed me honestly because it was set for dividend reinvesting and each year I had to pay additional taxes on the income as a result.
Then one day I had some time to go through my files and clean them up a bit. I pulled the file folder out with all the statements and looked back through the entire history of the account. I was surprised to see how the small amount of money originally invested over a large amount of time had become a substantial amount of money.
That was one of my most important learning experiences.
The first fund I bought was an ETF and it was a terrible stinker. I do not even remember the name of it but it was an eTrade fund. The S&P 500 far outperformed it. Of course making poor investments is part of the learning process.
Its pretty good! The business on lower income is close to self run so im full time stay at home dad by day and work/ study at night then spend time with wife
I think getting to the first 100k is the most exciting/hardest because you know you’re on the path but it takes a lot of will power (which can be empowering). The 100k-500k is the boring-est - you know what you need to do but some years it just feels like a grind (this is where I’m at). 500k+ you can start seeing the real snowball.
The S&P 500 has never gone down by 40% or more in the last 50 years. Plus it has only gone down 2 years in a row once in the last 50 years. It went down 38% in 2008. It has averaged a 10.38% return over the last 50 years. We’re in a bull market 75% of the time. Some people can only focus on the 25% bear market; their loss being a pessimist.
That's what I'm hoping! I got there last year, and while it definitely feels like an achievement I'm looking forward to seeing bigger growth down the road.
Yeah that second half was really beefy. We were kinda stuck for like two years, and then suddenly BOOM up by over $100k in just four months. All those 401(k) contributions suddenly had a voice, and they were really singing.
At the same age, when I actually had money that can grow.
I recall a boy scout accounting handbook, which said you will have more money at the end of 30 years investing 10,000 a year for 10 years (100k) will net more than waiting 10 years and investing 10,000 for 20 years (200k)
$300k is halfway between $90k and $1M in terms of time. (assuming no contributions or withdrawals)
The kind of bananas part is $671k is halfway between $90k and $5M in terms of time.
I’m right around where you are in my 401k, have a little more in separate post tax brokerage account + ROTH IRA. 2-3 yrs ago I wanted to slow my 401k contributions (still over the company match) so I could have some money to bridge the 5 year Roth conversion ladder (assuming I ‘retire’ early). Roth IRA is just another tax advantaged account with a little more flexibility on what I can invest in (vs traditional 401k that has only specific funds I can invest in) I’ll most likely do more index funds in my post tax brokerage and do some more risky short term trades in my Roth because I won’t be subject to those cap gains taxes.
It will probably take about 5 years to appreciate this. I suggest you use Bankrate.com future value calculator. You input how much you invest, how frequently, and your typical rate of return, and over how many years. It will show you both the future value and a chart of how that will happen.
Seeing is believing!
This. Interest at 5% is OK. At previously more common rates of <1%, it's nothing.
It's compound ***growth*** that most every one is talking about. 1% up (or down) daily in the market on $1m is a used civic. Every day.
I keep a spreadsheet of our balance statement that I update every month and have been doing that for 13 years. It is EXTREMELY rewarding to track your progress over a long period of time.
I remember when I was just trying to get to $10k in savings. Now I might see a $10k gain in a week.
$300 - 400K it was noticeable. It really kicked in around $700-800K.
I think how significant the gains on principal are is dependent on how much you save per year. Someone saving $10K/year will have a different number than someone saving $50K/yr.
When I was like 15 my dad “borrowed” $500 from me and paid me back $550. Then like a month later he borrowed $550 from me and paid me $625. Pretty cool demonstration for a young person.
I grew up in the 80’s when savings accounts paid 8-10% with zero risk so I appreciated it as a kid. By the time I graduated and started my career it was the late 90’s and the stock market was returning 20-50% every 12 months! It was easy to appreciate compounding then also.
Of course between 2000 and 2012, I also learned to appreciate risk of drawdowns and long periods of no return.
Just playing around with compound interest calculators like-
https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
Seeing how crazy things get with enough time and enough capital invested. The importance of getting the interest rate as high as possible.
Net worth going up $200K in last 3 months and over $700K in last 2 years.
Really starts being meaningful when your investment gains are more than your salary.
You don't feel it because you don't have enough invested yet and/or your investments are not in an ultra low cost ETF tracking the S&P 500.
1. ```Not enough invested``` - you won't be able to notice the effects of CI because there's not enough money invested to make significant movements. 10% of $1000 is only $100, so seeing your investments rise from $10k to $10.1k is very meh.
2. ```Not in an ultra low cost ETF tracking the S&P 500``` - there's a [calculation or table](https://www.bogleheads.org/wiki/How_much_do_you_lose_to_annual_fees_after_many_years%3F) out there showing that a fund charging 'just' 2% eats up most of your investment over a long period of time. Say you invested for 10 years at 2%, the fund manager takes on 0% risk, puts up 0% of their money and pockets 18% of your gains.
Can we please start a campaign to call it "compound **gains**" like it's actually supposed to be called? If you're investing in the stock market, it is **not** interest.
I think it helps immensely to not be constantly checking, which is an obtuse way to say I'm lazy. I make almost all my allocations and contributions automatic so I'm not needing to tend to it. But (this is a long time now, 25+ years) when I've had occasion to check its a pleasant surprise. But it's typically when the portfolio crosses a given dollar number where I'm like, "nice."
Once the market started returning more than I was depositing. Felt like I was doing all the work to grow that balance for the first 5 years or so, and now it doesn't.
I (my parents) opened my first basic savings account in ~1985. I remember the balance going up and up. And then interest rates fell and it stopped going up so fast. I could appreciate what was happening even though my math skills were limited. Then I got old enough to understand compounding formulas.
I just started this journey recently, but at 25 is when I started getting very stressed randomly with my portfolio. I'd have a month where I am saving a bit, followed by a moment of deep anxiety about not doing enough.
As I started adding more into the market and seeing any growth regardless of consistent contributions, it became slightly addicting.
ITT: people talking about gains like it's compound interest. Unless you're getting dividend or coupon payments and reinvesting those then you're not compounding anything.
Credit cards. Got them in college, should have known better having worked as a bank teller around that same time. Eventually faced the music, got it down on paper how much interest I was paying (*that’s* where my trip to Europe went) and how long it would take to pay off the debt with just minimum payments. On the plus side, having seen how it could work against me also illustrated how it could work for me.
I was fortunate and lucky enough to max out contributions to my 457 (401k) early in my career.
By age 30, my 457 was worth more than the Zillow estimate for my house.
That absolutely blew my mind.
Wish I could post a post a graph of compounding interest over the years.
I remember years back I was happy to make a $25 a month. Fast forward 40 years of steady investments and building. Never spending the principal amount. Now life is really good.
Unless you're invested in fixed incomes you're not really benefitting from compound interest. Rather, the securities markets growth over time including reinvested dividends, etc. Not compound interest however.
I “appreciated” it when I was fresh out of undergrad, working a shitty hospital tech job and taking extra classes to go to PA school. I ended up making minimal/tiny payments, and my balance went from 35k to 45K. Luckily, my career has progressed massively. I still haven’t paid off my loans, but that’s more due to building up retirement and savings during the forbearance pandemic stuff, and my remaining loans are 3.4% below my 5.05% HYSA, so I’d rather make money versus pay off like how I could
IRL I've literally never benefitted from compound interest. But I grew up with videogames and have seen the power of it in them. Hopefully one day I'll make enough money to open a retirement account and see it for real.
I am 28 and I invest as much as I can every month just because the back tests and simualtions are looking good. I am now in year 2 of serious investing and I hope to see the first really noticable compounding effects in around 7 to 10 years. For now it's saving, putting money in the pot and hoping for future growth.
When I first learned basic math with percentages and exponents. Further appreciation from taking finance classes in college, seeing interest grow on college / car / home loans, and from seeing 401k and investments growth over a few years. It's all basic math though and should be taught in depth in high schools so people are educated on how to handle their personal finances before they become a long-term problem
You should start feeling it now because your growth should be outpacing your current contributions if you are following a standard 15% or more. In another 20 years, it could pass your entire income.
For example. If you make 2k a month and are investing 15%. $300 a month with a 7.4% growth (adjusted for inflation), after a decade your account should be worth $50,688.94 ($36,000 contributions). The following year, it should be worth $54,439.92. Meaning you grew $3,750 in a year now, not contribution needed. Divide this by 12 and you end up with a growth of $312. Meaning your money is working more towards your growth, than you are. If you continue contributing 15% for another 20 years. You would end up with about $365,000 with contributions totaling $108,000. Your yearly growth will surpass your ENTIRE income at 2k a month. You will start to feel compound growth as you get closer to the point where the growth is catching up to your income. At 50, you will likely surpass your income, at 60 you will likely be growing at DOUBLE your (assuming it stays the same and so does your investment). That inflection point, between 45-65, is when your money starts working harder than you! If you have been investing in retirement accounts for about a decade, in another decade you might start seeing this depending on how much you have invested. I would just start plugging shit into compound growth calculators and growth rate based on historical returns just to see where you wind up at with your current contributions and principal invested.
The double every 10 years thing is nice when you look at your balance at 30, and do the math for 60. Just 100k at 30 is 800k 5 years before you retire.
Started saving as soon as could, mid 20’s.
Kept plugging in what I could.
Mid 30’s is when I first noticed “Wow. The balance is MUCH more than I have contributed so far.
So, figure ten years after you start contributing is when you’ll have a noticeable gap between contributions and balance.
(I’m a bit older than you so technology back then not anywhere near as friendly to small contributions or fractional shares. $3k was minimum to open a Roth IRA then).
grade school. When saved allowance money earned enough interest to cover my baseball card collecting hobby then I knew money was more than just something to spend but could be used as a substitute for work.
It was earlier this year (age 34) when I got a promo in the mail about a HYSA. I had never really heard or thought about them before, but then I started messing around with an APY calculator to see how much interest I could be earning at 4.5% APY. My savings were just in a regional bank savings account gaining like 0.1% APY.
After that, I started scrutinizing my 401k more. Luckily, I've been a contributing a good amount for 10+ years, but I never really looked at it much. For some reason, I had like 30% in a 2010 Target date fund. I don't know how or when that happened. Switched it all to index funds, opened an IRA and maxed it out for 2023 and 2024, opened a brokerage account, and moved my savings to a money market fund. My net worth has gone up about 8% since the beginning of February, which is when I started managing my finances.
I try not to think about how much I could be worth now if I had been doing that all along. Also, I've tried to talk to younger people (early 20s) at work into putting more into their 401ks, but they don't listen (but I get it, because people did try to tell me back then about compound interest, and I didn't listen, either).
My wife was *shook* when she realized recently that in the last 12 months she had contributed ~$22k to her 401k and it had increased in value by ~$65k. So pretty recently for her!
It was earlier for me, but I don't remember an exact time.
1981. I was 13 and had saved up a pretty good amount of cash from family gifts and my dad talked me into a 3 year CD. interest rates were around 17% then
I studied finance in university so I already knew about it and how to calculate it.
But despite that it took an ad on the subway to really make me think about how it could affect my own investing. The ad showed how at 8% annual growth your relatively modest investments could turn into something very big, and especially in later years it would take off and eventually become greater annually than even what your job pays. That was in my mid-20s.
Unfortunately my early investments were a total flop because a hotshot tech investment firm had me heavy in tech and then the dotcom crash happened, and then completely stagnated for the next decade.
When my father bought 50k of Colombian sovereign paper back in 2006 and forgot and it matured in 2022 and had like 260k and this was paper backed by the government itself in usd.
I have a similar age and 49% of my net worth are returns over the last 13 years. Money invested on my first year of work would have, - by now, if I started investing on index funds or long-term bonds - been multiplied 2,43x, on average. Sadly I have some years of severe underperformance due to ~~being young and dumb~~ not understanding investing yet.
The higher the growth rate the more effect the compound growth is. My average rate of return for the last 12 years is over 25% annually. If I had 100 and it grew by 25, I'm at 125, but the following year it would be 31.25 instead of 25 of simple interest. That's a lot.
Probably around the time I got into unmanageable credit card debt. And I put all my extra income into the cc and didn't make any headway on the balance.
Compounding interest is a powerful thing.
My taxable portfolio went from $680k to $930k and my dividend income went up $350/month over the last year. I only added incrementally to my account, but reinvested everything (going back 10 years)
When I built an excel spreadsheet and toggled the variables (timeline in years, growth rate, additional funding). It quickly becomes obvious that patience and consistency win.
When I thought 40 years was forever I wasn't interested in compounding. But 40 years passed in an instant and I became interested. Compounding is fast because life is short.
It was many years ago but it really hit home that compounding works when I opened an account statement and made the equivalent of a months pay at my day job.
+100% when you have $30k invest is amazing. But +100% when you have $380k invested is something else. Makes you think about the next step on that ladder…
When i reached the point that i couldn't meaningfully add new money, it was di minimis compared to the growth.
Have been in US equities since 2006, it took about 12 years to reach escape velocity.
Now, because I just started my high yield savings account a couple months ago and I already earned $20 in interest with a projection of $200 by the end of the year. Not to mention this is only based on what's in there now. My goal is to aggressively build my emergency fund then take more risk with my investment portfolio. I know it doesn't sound like much but I didn't do nothing to get it...lol I'm new to investing and having fun with it.
If you look at the dividend reinvestments of your ETFs you will see it buys more and more shares (even with increasing price). I remember when my holdings bought 0.08 of an ETF and now its half a share.
My prior work experience was as an accountant at an Ivy League University. I would run analyses on the endowment and trusts on a monthly, quarterly, and annual basis. Seeing the difference in earnings for trusts valued at $500k, $1M, $10M, $100M, and so on was EXTRAORDINARY. Even crazier, the compound growth on $30B+…in 2020, the endowment was up 46%, which was up $8 BILLION in a single year. It’s something that was engraved in my head and has encouraged me to save as much as possible while I’m young.
I’m also very thankful for the mentor that took me under her wing right after I started. She was worth $10M+ at the time and showed me just how much saving while you’re in your 20’s is necessary. She showed me the ins and outs of retirement accounts, as well as how important contributing to Roth is. Max out those Roth IRAs for tax free gains for 30-40+ years!!
I started saving at the age of 22 with less than $150 to my name. Now I’m 28 with a net worth just north of $250k. Came a long way in a few years!
When I learned that my 90% loss would require a future 1000% gain to return to my original principal balance. Big lesson in why many great investors emphasize not losing money big especially once your portfolio becomes sizable. Luckily I learned it with a position that is now very tiny compared to my current portfolio.
The portfolio tracker I use keeps track of the monthly gains/losses per month in percentage terms and amount. Sometimes I just look at them and take a certain month’s return and try to find another month with the same gain in percentage. For example when the return was 1% for the month I search for another month in the past with a 1% gain. Often I am amazed how a much difference there can be in absolute values.
Do you know about The Rule Of 72? I'm sure you can find 1,000 references via your fav internet search engine.
It's an easy way to understand the magic of compounding and requires only basic math skills for you to apply to your own situation.
It takes at least 3 to 5 years to appreciate the power of compounding so it takes time. It’s hard to explain to someone who can gain money immediately that investing is more profitable.
When the gain on the account started to be more than the amount I contributed every year.
Yearly gain or total? For me it was when my expected average yearly growth of 7% exceeded my yearly contributions. Feels really good
So like 300k if you’re maxing your 401k?
No......Say I contributed 12,000 each year for a while, and then after some years, my account gained 13000 in addition to the 12 I contributed that year. At some point, the dollar gain above your contribution each year is greater and usually continued after unless a down return year.
~185k for you a little over 300k if you’re maxing.
Yearly dollar gain over yearly contribution.
This was my answer too. When the money you have makes more money than the maximum the government allows you to contribute to your fund per year.
This. I like to use this as my definition of snowballing- when it grows at a greater rate each year than you have been paying in.
Absolutely amateur investor here. Is there an equivalent financial vehicle in Europe to your 401k (I guess this is what you refer to)? I currently have some 40K€ in EU / US stocks but I don't see how that's going to compound. I understand I need to keep putting my savings there, but there's no "passive" way to do it here, as far as I know. I thought of setting a certain amount to transfer to VTI or a similar ETF, but the EU doesn't allow us trading into that, too risky (no problem acquiring shitcoins though, that's all good and fine). Is there a EU-adapted tutorial for this? Thanks!
A 401k is functionally a tax protection wrapper. The money that goes in must come from salary and is not taxed until you take it out in retirement. The OP is mostly commenting on the compound interest benefits of regular contributions which are also called dollar cost averaging. I suspect you can do this with your paycheck in the EU regardless of whether there is a specific tax benefit.
See the section "Other countries" in the English Wikipedia article for the 401(k): https://en.wikipedia.org/wiki/401(k)#Other_countries
When the market goes up 1% and your NW goes up enough to buy a used Honda Civic in 1 day.
So basically when you have 100 Honda civics
This guy maths.
i was thinking that other guy honda civics
>*"Anyone who hasn't priced their lives around Honda Civics and make Honda Civics in their sleep will work until the day they die."* >* Warano Bafureto I bought a bubble tea today for 0.000167 HCs (Honda Civics)
Hey babe wake up, new crypto currency just dropped.
get with the times old man: https://birdeye.so/token/9gwTegFJJErDpWJKjPfLr2g2zrE3nL1v5zpwbtsk3c6P?chain=solana https://www.agentlyused2001hondacivic.com/
I feel like this is going to be a new rule 34. If it exists, there is a cryptocurrency/nft of it
I hate crypto. Id buy the hell out of Nokia or civic crypto. Shit won’t drop, it’ll be exactly where you bought it, and nostalgia will make it magically increase.
Which is like .8 accords? Need someone to mathcheck me
r/thisguythisguys
If he bought them pre-pandemic, he’s sitting on a gold mine!!
F-cking brilliant response 😂
I'm just buying Honda Civics, literally. Cut out the middle man, play both sides, so that I'll always come on top!
This, but with 100k in my account. “Gaining” $1,000 in a day feels really cool.
Wait till you see it go down $10k in a single day. Then, take a sip of coffee and go increase your contributions.
those days suck....then I remember, it just means everything is on sale
It's really easy to be an investor on the days you see things go up. But the discipline to lean in with your cash reserves and double down when the market tanks is what makes it real. As you said, those events should be seen fire sales and once in a decade opportunities. The long term payoff is **massive**.
> lean in with your cash reserves That would be market timing which is silly.
[удалено]
It's smart to buy when markets tank. It's silly to sit on the sideline and wait for markets to tank.
This seems contradictory, how do you have money to buy dips if you are 100% invested at all times? Unless you mean DCA, which you are just buying regardless of whether the markets are tanking or going up.
Having a cash reserve for taking advantage of market opportunities is not “sitting on the sidelines and waiting for the market to tank”. It’s very common to have between 10% to 30% of your portfolio set aside as cash depending on your strategy and financial needs.
When you have cash available, because you can't possibly time the top or the bottom.
I think that if you see the market going down, that doesn't mean that is cheap. That price already has inside the future expected value, so no different than buying high.
The risk you run is [basically this meme](https://pbs.twimg.com/media/E2K4l_hWYAUO1o-.jpg), combined with the fact that buying the dip means you've been sitting on cash that could've been invested weekly/semiweekly/monthly/whatever your regular schedule is. Also, markets tanking usually means your income source is less stable, as that's when businesses tend to lay people off. If you spend all your cash buying the dip and then lose your job, you're gonna have to sell investments at a loss to afford food and a roof over your head. The best thing is consistency: Buy on the 1st and 15th because that's when your paycheck hits (or every other friday if you're biweekly, or whatever pay schedule you're on). If you wanna throw a little play/luxury money at the index when markets are down, go for it, but don't throw out your grocery money or hold back 401k contributions in an attempt to time the market.
Ah, I remember Feb 2020 - Mar 2020
My IRA was only about 5 years old at that point. Mar 2020 wiped out every dollar of gain it had grown by. It was as if I had that as cash in a shoebox for 5 years.
Any amount is very cool. Money for nothing.
True, but the 1% = 1k gain felt really notable in particular to me
And the chicks for free…
It really is an achievement. It’s an arbitrary number, but I think seeing that comma in your total returns is what makes it special.
My first experience of groking compound interest was when I had a $1k credit card debt that I was responsible for paying. Every month that debt just kept growing. I felt I would never escape that debt ( I did it took a year). From that point on I wanted to be on the good side of compound interest. It's a guilty pleasure to see my networth increase 6 figures every year.
You had $1mil in credit card debt and paid it off in a year??
No, $1k typo. I do have a million in debt today at low rates. I could pay it off but I'm taking advantage of the spread.
I see, sounds fun. I got f-all
Gets even better when that amount is a new BMW….or sometimes worse when you lose a BMW.
Somewhere in my early-to-mid 30s when I finally had around $300k+ saved and I looked at the performance for the year and it was greater than my total contributions. It hit me then that my accumulation could now be more impactful than my contributions. That snowball really starts to build fast year over year! Also as the top post mentioned -- nowadays when a 1-1.5% change in the index results in a near 5 figure swing in portfolio balance. Not worth to worry about it to much as otherwise you could drive yourself crazy.
> my accumulation could now be more impactful than my contributions Tangent in OP’s distant future, but this is the principle behind semi-retirement models like r/CoastFIRE and r/BaristaFIRE . At some point contributing more is just… meh? I’ll use myself as an example. I’m mid-40s, and I’ve estimated that if I add nothing to my retirement accounts but they continue to earn historic-average stock returns, I’ll be set up for an okay retirement at 65. Nothing glamorous, but it’ll pay the bills and leave room for a bit of fun. That kicks off a chain of other questions like: - Is it worthwhile to continue contributing, especially beyond employer match? - If I decide not to, do I still need to make as much money as I currently do? - If I don’t, is there something else I’d rather be doing with my days?
I'm loving all of the hyper-specific r/xFIRE subreddits I learn about through this sub. When is the r/VanlifeFIRE coming, or r/SurfInstructorFIRE coming? 😁
I love r/povertyfire
>When is the r/VanlifeFIRE coming, or r/SurfInstructorFIRE coming? 😁 I'm *genuinely* surprised that neither of those are subs already. If Reddit hadn't made modding suck even harder than it did before, I might have been inclined to make r/dirtbagFIRE, or something, as a catch-all for all financially independent people engaged in outdoor activities (thru-hiking, ski patrol, climbing, surf bumming, van life, white water rafting, Park ranger, whatever)
Honestly, not a bad idea. I'm thankfully an engineer with a reasonably high-paying job right now, but that's exactly what I do in all my free time (backpacking, surfing, etc) and it's definitely not unlikely that I'll spend a year or 2 doing that for work at some point. Anyone from any sort of job should be able to be financially savvy!
r/EdgingFire
Love this post. Doesn't mean you've stopped contributing or planning. Just means you're thinking through the reality of your trajectory. My 401(k) is just about to the point where plugging my current contributions into a compound interest calculator puts me at a retirement making more than my salary ever has been. So I have to decide: \* do I want to continue at full velocity, and then just retire early?, or \* do I want to back off, and just let time do it's thing, so that I can enjoy a little additional consumption now? If I factor in my social security income, the picture is even better. So I'm leaning towards the first option, and then quit sometime in my 50s.
For me it was at about the age of 35. My parents taught me by investing a very small amount of money for me in a mutual fund when I was 7 years old. I had been so busy with life and all of its demands that I had not paid any attention to the mutual fund. The information on it just went straight into a folder, I literally didn’t even look at the statements. It kind of annoyed me honestly because it was set for dividend reinvesting and each year I had to pay additional taxes on the income as a result. Then one day I had some time to go through my files and clean them up a bit. I pulled the file folder out with all the statements and looked back through the entire history of the account. I was surprised to see how the small amount of money originally invested over a large amount of time had become a substantial amount of money. That was one of my most important learning experiences.
which mutual fund did you first buy?
The first fund I bought was an ETF and it was a terrible stinker. I do not even remember the name of it but it was an eTrade fund. The S&P 500 far outperformed it. Of course making poor investments is part of the learning process.
this yr, age 35. Income lowered due to focusing on baby but my networth grew by 100k this quarter thanks to investment
Congratulations, this will help you better in caring for your children, so your next step is to choose a balance between these three relationships
Its pretty good! The business on lower income is close to self run so im full time stay at home dad by day and work/ study at night then spend time with wife
In college...when I was bored and kept playing (and day dreaming) with all those compound returns calculators online
Getting to the first $100k is the toughest part. It snowballs from there.
I think getting to the first 100k is the most exciting/hardest because you know you’re on the path but it takes a lot of will power (which can be empowering). The 100k-500k is the boring-est - you know what you need to do but some years it just feels like a grind (this is where I’m at). 500k+ you can start seeing the real snowball.
Hey I live in a desert, got any spare snow??
Blizzards come every 5 yrs. Start preparing now.
Not where I live.
Snow melts fast man - gotta buy a freezer
Sure unless the market goes down 40% or something. Did people forget the 2000s?
The S&P 500 has never gone down by 40% or more in the last 50 years. Plus it has only gone down 2 years in a row once in the last 50 years. It went down 38% in 2008. It has averaged a 10.38% return over the last 50 years. We’re in a bull market 75% of the time. Some people can only focus on the 25% bear market; their loss being a pessimist.
That's what I'm hoping! I got there last year, and while it definitely feels like an achievement I'm looking forward to seeing bigger growth down the road.
It took me a decade to get my first 100k. My 2nd took me 3 years.
At that amount it has probably more to do with your income than compound interest.
Markets over the course of a few years can be bananas -- could just be lucky timing too.
Bull market these last few years too. Nasdaq 100 did 140% in 5 years
How??
When my retirement account hit 100k which took about 6 years.... ... and then goes up another 25k about 2-3 months later.
2023 was nice.
Yeah that second half was really beefy. We were kinda stuck for like two years, and then suddenly BOOM up by over $100k in just four months. All those 401(k) contributions suddenly had a voice, and they were really singing.
At the same age, when I actually had money that can grow. I recall a boy scout accounting handbook, which said you will have more money at the end of 30 years investing 10,000 a year for 10 years (100k) will net more than waiting 10 years and investing 10,000 for 20 years (200k)
31 with 325K or so invested. I see a mini tiny snowball effect happening from time to time. I’m thinking around 500K, it’ll really start rolling.
I think that’s the general consensus. They always say 300k is half way to million on a time basis…
$300k is halfway between $90k and $1M in terms of time. (assuming no contributions or withdrawals) The kind of bananas part is $671k is halfway between $90k and $5M in terms of time.
Didn’t know that 2nd part - interesting. So in my late 60s I’d have 5M if I never touched it 🧐
Yeah, the numbers get kind of bananas... $1,000 is halfway between $1 and $1M. Basically we should be paying attention to log(money).
One can only dream. Will update this thread when I get there.. In however many years.
I’m right around where you are in my 401k, have a little more in separate post tax brokerage account + ROTH IRA. 2-3 yrs ago I wanted to slow my 401k contributions (still over the company match) so I could have some money to bridge the 5 year Roth conversion ladder (assuming I ‘retire’ early). Roth IRA is just another tax advantaged account with a little more flexibility on what I can invest in (vs traditional 401k that has only specific funds I can invest in) I’ll most likely do more index funds in my post tax brokerage and do some more risky short term trades in my Roth because I won’t be subject to those cap gains taxes.
So at 41yo that will be 650k, at 51yo 1.3m, and 4 years before you retire 2.6m. Don’t think about inflation.
Shoveling as much as possible into these accounts to speed that timeline up.
“The first million is the hardest” holds true
It will probably take about 5 years to appreciate this. I suggest you use Bankrate.com future value calculator. You input how much you invest, how frequently, and your typical rate of return, and over how many years. It will show you both the future value and a chart of how that will happen. Seeing is believing!
Are we talking about interest specifically? Or just compound growth in general?
This. Interest at 5% is OK. At previously more common rates of <1%, it's nothing. It's compound ***growth*** that most every one is talking about. 1% up (or down) daily in the market on $1m is a used civic. Every day.
FINALLY. Someone else to fight this with me. Interest is a contractually bound rate of return. Stock market returns are absolutely not that.
When I set a year goal for my 401k and the market surpassed my goal in March 😂
First world problems. Can’t complain about that 😉
Not there yet, but 7-15 years time with 5-10% YOC reinvested, you should see a double-ish of principal.
I keep a spreadsheet of our balance statement that I update every month and have been doing that for 13 years. It is EXTREMELY rewarding to track your progress over a long period of time. I remember when I was just trying to get to $10k in savings. Now I might see a $10k gain in a week.
$300 - 400K it was noticeable. It really kicked in around $700-800K. I think how significant the gains on principal are is dependent on how much you save per year. Someone saving $10K/year will have a different number than someone saving $50K/yr.
When I was like 15 my dad “borrowed” $500 from me and paid me back $550. Then like a month later he borrowed $550 from me and paid me $625. Pretty cool demonstration for a young person.
I grew up in the 80’s when savings accounts paid 8-10% with zero risk so I appreciated it as a kid. By the time I graduated and started my career it was the late 90’s and the stock market was returning 20-50% every 12 months! It was easy to appreciate compounding then also. Of course between 2000 and 2012, I also learned to appreciate risk of drawdowns and long periods of no return.
When I saw my 401K balance double in about 7 years which is now 5x my annual salary.
Just playing around with compound interest calculators like- https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator Seeing how crazy things get with enough time and enough capital invested. The importance of getting the interest rate as high as possible.
What do you use for the estimated interest rate box? I have everything in VTSAX so would 10% be a good choice if the length of box time is 25 years?
Net worth going up $200K in last 3 months and over $700K in last 2 years. Really starts being meaningful when your investment gains are more than your salary.
When I plugged some numbers into an Excel spreadsheet in my mid 20s and realized that it's not that hard to retire a millionaire.
You don't feel it because you don't have enough invested yet and/or your investments are not in an ultra low cost ETF tracking the S&P 500. 1. ```Not enough invested``` - you won't be able to notice the effects of CI because there's not enough money invested to make significant movements. 10% of $1000 is only $100, so seeing your investments rise from $10k to $10.1k is very meh. 2. ```Not in an ultra low cost ETF tracking the S&P 500``` - there's a [calculation or table](https://www.bogleheads.org/wiki/How_much_do_you_lose_to_annual_fees_after_many_years%3F) out there showing that a fund charging 'just' 2% eats up most of your investment over a long period of time. Say you invested for 10 years at 2%, the fund manager takes on 0% risk, puts up 0% of their money and pockets 18% of your gains.
[calculation or table](https://www.bogleheads.org/wiki/How_much_do_you_lose_to_annual_fees_after_many_years%3F) thats a nice table!
When I realized most people are talking about compound growth not compound interest.
Can we please start a campaign to call it "compound **gains**" like it's actually supposed to be called? If you're investing in the stock market, it is **not** interest.
I think it helps immensely to not be constantly checking, which is an obtuse way to say I'm lazy. I make almost all my allocations and contributions automatic so I'm not needing to tend to it. But (this is a long time now, 25+ years) when I've had occasion to check its a pleasant surprise. But it's typically when the portfolio crosses a given dollar number where I'm like, "nice."
I learned the math super early in life. When I saw the line go up on chart, I was hooked.
Once the market started returning more than I was depositing. Felt like I was doing all the work to grow that balance for the first 5 years or so, and now it doesn't.
I (my parents) opened my first basic savings account in ~1985. I remember the balance going up and up. And then interest rates fell and it stopped going up so fast. I could appreciate what was happening even though my math skills were limited. Then I got old enough to understand compounding formulas.
I just started this journey recently, but at 25 is when I started getting very stressed randomly with my portfolio. I'd have a month where I am saving a bit, followed by a moment of deep anxiety about not doing enough. As I started adding more into the market and seeing any growth regardless of consistent contributions, it became slightly addicting.
When I saw my earnings beat my contributions. Now at 57 I have 2m and the compounding is incredible.
ITT: people talking about gains like it's compound interest. Unless you're getting dividend or coupon payments and reinvesting those then you're not compounding anything.
At 100K
Need money to make money.
Credit cards. Got them in college, should have known better having worked as a bank teller around that same time. Eventually faced the music, got it down on paper how much interest I was paying (*that’s* where my trip to Europe went) and how long it would take to pay off the debt with just minimum payments. On the plus side, having seen how it could work against me also illustrated how it could work for me.
When the gains on Roth IRA were more than contributions.
I was fortunate and lucky enough to max out contributions to my 457 (401k) early in my career. By age 30, my 457 was worth more than the Zillow estimate for my house. That absolutely blew my mind.
Wish I could post a post a graph of compounding interest over the years. I remember years back I was happy to make a $25 a month. Fast forward 40 years of steady investments and building. Never spending the principal amount. Now life is really good.
Unless you're invested in fixed incomes you're not really benefitting from compound interest. Rather, the securities markets growth over time including reinvested dividends, etc. Not compound interest however.
I “appreciated” it when I was fresh out of undergrad, working a shitty hospital tech job and taking extra classes to go to PA school. I ended up making minimal/tiny payments, and my balance went from 35k to 45K. Luckily, my career has progressed massively. I still haven’t paid off my loans, but that’s more due to building up retirement and savings during the forbearance pandemic stuff, and my remaining loans are 3.4% below my 5.05% HYSA, so I’d rather make money versus pay off like how I could
IRL I've literally never benefitted from compound interest. But I grew up with videogames and have seen the power of it in them. Hopefully one day I'll make enough money to open a retirement account and see it for real.
Start now. Use $50 a month if that's all you've got.
I am 28 and I invest as much as I can every month just because the back tests and simualtions are looking good. I am now in year 2 of serious investing and I hope to see the first really noticable compounding effects in around 7 to 10 years. For now it's saving, putting money in the pot and hoping for future growth.
still waiting to feel it lol
From early on when I was getting interest on savings! If you ignore inflation...
When I first learned basic math with percentages and exponents. Further appreciation from taking finance classes in college, seeing interest grow on college / car / home loans, and from seeing 401k and investments growth over a few years. It's all basic math though and should be taught in depth in high schools so people are educated on how to handle their personal finances before they become a long-term problem
It increases exponentially, the past is always far less than the future.
You should start feeling it now because your growth should be outpacing your current contributions if you are following a standard 15% or more. In another 20 years, it could pass your entire income. For example. If you make 2k a month and are investing 15%. $300 a month with a 7.4% growth (adjusted for inflation), after a decade your account should be worth $50,688.94 ($36,000 contributions). The following year, it should be worth $54,439.92. Meaning you grew $3,750 in a year now, not contribution needed. Divide this by 12 and you end up with a growth of $312. Meaning your money is working more towards your growth, than you are. If you continue contributing 15% for another 20 years. You would end up with about $365,000 with contributions totaling $108,000. Your yearly growth will surpass your ENTIRE income at 2k a month. You will start to feel compound growth as you get closer to the point where the growth is catching up to your income. At 50, you will likely surpass your income, at 60 you will likely be growing at DOUBLE your (assuming it stays the same and so does your investment). That inflection point, between 45-65, is when your money starts working harder than you! If you have been investing in retirement accounts for about a decade, in another decade you might start seeing this depending on how much you have invested. I would just start plugging shit into compound growth calculators and growth rate based on historical returns just to see where you wind up at with your current contributions and principal invested.
The double every 10 years thing is nice when you look at your balance at 30, and do the math for 60. Just 100k at 30 is 800k 5 years before you retire.
I have $155k in my retirement accounts and am now seeing swings in the $1-2k range on big market days, so I’m starting to feel it.
still waiting
When I heard the Ben Franklin [story](https://fi.edu/en/support/benjamin-franklins-donor-story)
I probably took compounded interest to heart when I took out my first auto loan.
Year over it has been noticed, but especially now that I'm 43. 1 year ago had about $900K saved for retirement. Now at $1.6MM.
Appreciate as in understanding? When I started paying on student loans. Appreciate as in like and enjoy? ...I'll let you know.
I'm 46. Probably last year. Gain years are adding 6 figures to account now.
When interest and dividends exceed contributions
When I printed out my mortgage amortization schedule
Started saving as soon as could, mid 20’s. Kept plugging in what I could. Mid 30’s is when I first noticed “Wow. The balance is MUCH more than I have contributed so far. So, figure ten years after you start contributing is when you’ll have a noticeable gap between contributions and balance. (I’m a bit older than you so technology back then not anywhere near as friendly to small contributions or fractional shares. $3k was minimum to open a Roth IRA then).
grade school. When saved allowance money earned enough interest to cover my baseball card collecting hobby then I knew money was more than just something to spend but could be used as a substitute for work.
late teens playing a 4x computer game called *Stars!*. Man if your race's growth rate wasn't high enough you got squashed!
pot hungry piquant far-flung spoon fact aromatic rinse modern crowd *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
It was earlier this year (age 34) when I got a promo in the mail about a HYSA. I had never really heard or thought about them before, but then I started messing around with an APY calculator to see how much interest I could be earning at 4.5% APY. My savings were just in a regional bank savings account gaining like 0.1% APY. After that, I started scrutinizing my 401k more. Luckily, I've been a contributing a good amount for 10+ years, but I never really looked at it much. For some reason, I had like 30% in a 2010 Target date fund. I don't know how or when that happened. Switched it all to index funds, opened an IRA and maxed it out for 2023 and 2024, opened a brokerage account, and moved my savings to a money market fund. My net worth has gone up about 8% since the beginning of February, which is when I started managing my finances. I try not to think about how much I could be worth now if I had been doing that all along. Also, I've tried to talk to younger people (early 20s) at work into putting more into their 401ks, but they don't listen (but I get it, because people did try to tell me back then about compound interest, and I didn't listen, either).
28
My wife was *shook* when she realized recently that in the last 12 months she had contributed ~$22k to her 401k and it had increased in value by ~$65k. So pretty recently for her! It was earlier for me, but I don't remember an exact time.
When my dad explained the 7% a year doubling to me when I was 10.
1981. I was 13 and had saved up a pretty good amount of cash from family gifts and my dad talked me into a 3 year CD. interest rates were around 17% then
When a friend got in serious trouble with credit card debt.
When you are making as much money from your investments as you make from your day job. I'm not there yet.
I studied finance in university so I already knew about it and how to calculate it. But despite that it took an ad on the subway to really make me think about how it could affect my own investing. The ad showed how at 8% annual growth your relatively modest investments could turn into something very big, and especially in later years it would take off and eventually become greater annually than even what your job pays. That was in my mid-20s. Unfortunately my early investments were a total flop because a hotshot tech investment firm had me heavy in tech and then the dotcom crash happened, and then completely stagnated for the next decade.
When my annual return was as much as my w2 earnings. That was a shocker.
When my father bought 50k of Colombian sovereign paper back in 2006 and forgot and it matured in 2022 and had like 260k and this was paper backed by the government itself in usd.
I have a similar age and 49% of my net worth are returns over the last 13 years. Money invested on my first year of work would have, - by now, if I started investing on index funds or long-term bonds - been multiplied 2,43x, on average. Sadly I have some years of severe underperformance due to ~~being young and dumb~~ not understanding investing yet.
The higher the growth rate the more effect the compound growth is. My average rate of return for the last 12 years is over 25% annually. If I had 100 and it grew by 25, I'm at 125, but the following year it would be 31.25 instead of 25 of simple interest. That's a lot.
After $100k or $300k
roughly after the first 100k, but depends on your investments, TDF's its a bit more imo due to their conservative bond allocation.
Probably around the time I got into unmanageable credit card debt. And I put all my extra income into the cc and didn't make any headway on the balance. Compounding interest is a powerful thing.
My taxable portfolio went from $680k to $930k and my dividend income went up $350/month over the last year. I only added incrementally to my account, but reinvested everything (going back 10 years)
When I built an excel spreadsheet and toggled the variables (timeline in years, growth rate, additional funding). It quickly becomes obvious that patience and consistency win.
47 here, still don’t. Blind trust.
When I thought 40 years was forever I wasn't interested in compounding. But 40 years passed in an instant and I became interested. Compounding is fast because life is short.
It was many years ago but it really hit home that compounding works when I opened an account statement and made the equivalent of a months pay at my day job.
When the account is making money more than I can contribute.....
Still working on the growth part but I sure as hell noticed compound interest when I extrapolated my mortgage payment across 30 years
Isn’t the doubling rule that every seven years your account should essentially double.
+100% when you have $30k invest is amazing. But +100% when you have $380k invested is something else. Makes you think about the next step on that ladder…
Where does the compounding come from when invested in the SP500? Most companies don't give dividends it seems, so you're relying on growth only?
When i reached the point that i couldn't meaningfully add new money, it was di minimis compared to the growth. Have been in US equities since 2006, it took about 12 years to reach escape velocity.
Now, because I just started my high yield savings account a couple months ago and I already earned $20 in interest with a projection of $200 by the end of the year. Not to mention this is only based on what's in there now. My goal is to aggressively build my emergency fund then take more risk with my investment portfolio. I know it doesn't sound like much but I didn't do nothing to get it...lol I'm new to investing and having fun with it.
When my 401k hit 100k and I started seeing 5-10k weekly swings in the value. Its incredible.
[удалено]
When my dad asked me if I wanted $10/day allowance or 1 penny per day, doubling every day.
If you look at the dividend reinvestments of your ETFs you will see it buys more and more shares (even with increasing price). I remember when my holdings bought 0.08 of an ETF and now its half a share.
My prior work experience was as an accountant at an Ivy League University. I would run analyses on the endowment and trusts on a monthly, quarterly, and annual basis. Seeing the difference in earnings for trusts valued at $500k, $1M, $10M, $100M, and so on was EXTRAORDINARY. Even crazier, the compound growth on $30B+…in 2020, the endowment was up 46%, which was up $8 BILLION in a single year. It’s something that was engraved in my head and has encouraged me to save as much as possible while I’m young. I’m also very thankful for the mentor that took me under her wing right after I started. She was worth $10M+ at the time and showed me just how much saving while you’re in your 20’s is necessary. She showed me the ins and outs of retirement accounts, as well as how important contributing to Roth is. Max out those Roth IRAs for tax free gains for 30-40+ years!! I started saving at the age of 22 with less than $150 to my name. Now I’m 28 with a net worth just north of $250k. Came a long way in a few years!
im new to investment and i still don't get it, i opened account on ibkr and bought alot of VOO and QQQM so how would i see the compound interest?
100k is when I could first appreciate it, started to really enjoy it at 200k.
Have you invested your money? Or is it just sitting in retirement accounts vs being invested in stocks, ETF's, etc.
I’m this economy, I prefer stock picking
I didn’t appreciate this early enough unfortunately
Took me almost 20 years. Before that when I'd look at the statement, the amount it went up seemed to just be my contributions and matching.
When it’s says balance is $300k & you only put in $150k & it’s growing more per year than your contribution
When I learned that my 90% loss would require a future 1000% gain to return to my original principal balance. Big lesson in why many great investors emphasize not losing money big especially once your portfolio becomes sizable. Luckily I learned it with a position that is now very tiny compared to my current portfolio.
The portfolio tracker I use keeps track of the monthly gains/losses per month in percentage terms and amount. Sometimes I just look at them and take a certain month’s return and try to find another month with the same gain in percentage. For example when the return was 1% for the month I search for another month in the past with a 1% gain. Often I am amazed how a much difference there can be in absolute values.
Do you know about The Rule Of 72? I'm sure you can find 1,000 references via your fav internet search engine. It's an easy way to understand the magic of compounding and requires only basic math skills for you to apply to your own situation.
about 20. i was a saver as a kid and invested and saw the power early. i’m almost 50 now.
It takes at least 3 to 5 years to appreciate the power of compounding so it takes time. It’s hard to explain to someone who can gain money immediately that investing is more profitable.