Find out how young, first-time investors have an upper hand on older, wiser Wall Street investors. Watch my video!
Don't work hard, work smart. While this might seem like a lazy person's adage, this philosophy carries a fair amount of genius.
It celebrates efficiency and innovation to use your already-invested efforts to create a more proficient and productive result.
For example, instead of carrying a boulder from one place to the next, you roll it, or use leverage and gravity to your advantage in moving the cumbersome object.
You make the rock work for you.
In much the same manner, investing is a tool that makes your money work for you and that will start you toward a secure financial destination.
Compounding interest
Compounding interest is the underlying concept that allows your money to grow on its own and that will lead to a lucrative future.
It's the interest you earn on your original investment plus the interest you've already accrued.
Compounding interest is a cyclical machine that feeds itself and keeps growing at an exponential rate. And the best part about compound interest is that young people—that means us—have the advantage!
Young, first-time investors have an upper hand on older, wiser, Wall Street investors and stock market gurus because young people have more of something than the others—time.
What counts? The time you spend in the market.
About time
With time and compounding interest working for you, you can take a seemingly insignificant investment and watch it grow into a small fortune.
Watch them in action: Click on the graph to the right to see the different results when a 16, 26, 36, and 46-year-old each invest $2,000 a year for 10 years in the stock market.
The disparity is significant. It illustrates an important notion; it's not your timing of entering the market, rather it is the time you spend in the market that counts, and counts, and counts, and counts...
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