Behold the Weakness of Late

Claudette and Claude each start an IRA.

Claudette put $2,000 in a year starting on January 1, 2001 and put $2,000 in every year (on January 1^st) through 2008.

Claude started his IRA on January 1, 2009. He put $2,000 a year in every year (on January 1^st) for 32 years through 2040.

Each person averages the same rate of return of 10% per year.

This illustrates, once again, the impact that time has on investment results and the importance of starting as early as possible.

Claudette Starts Contributing in 2001

2001 Claudette’s Contribution: 2,000 Claudette’s Yr End Value: 2,200

2002 Claudette’s Contribution: 2,000 Claudette’s Yr End Value: 4,620

2003 Claudette’s Contribution: 2,000 Claudette’s Yr End Value: 7,282

2004 Claudette’s Contribution: 2,000 Claudette’s Yr End Value: 10,210

2005 Claudette’s Contribution: 2,000 Claudette’s Yr End Value: 13,431

2006 Claudette’s Contribution: 2,000 Claudette’s Yr End Value: 16,974

2007 Claudette’s Contribution: 2,000 Claudette’s Yr End Value: 20,872

2008 Claudette’s Contribution: 2,000 Claudette’s Yr End Value: 25,159

Claudette Stops Contributing and Claude Starts Contributing in 2009

2009 Claudette’s Contribution: 0 Claudette’s Yr End Value: 27,675

2009 Claude’s Contribution: 2,000 Claude’s Yr End Value: 2,200

2010 Claudette’s Contribution: 0 Claudette’s Yr End: 30,442

2010 Claude’s Contribution: 2,000 Claude’s Yr End Value: 4,620

2011 Claudette’s Contribution: 0 Claudette’s Yr End: 33,487

2011 Claude’s Contribution: 2,000 Claude’s Yr End Value: 7,282

2012 Claudette’s Contribution: 0 Claudette’s Yr End: 36,835

2012 Claude’s Contribution: 2,000 Claude’s Yr End Value: 10,210

2013 Claudette’s Contribution: 0 Claudette’s Yr End: 40,519

2013 Claude’s Contribution: 2,000 Claude’s Yr End Value: 13,431

2014 Claudette’s Contribution: 0 Claudette’s Yr End: 44,571

2014 Claude’s Contribution: 2,000 Claude’s Yr End Value: 16,974

2015 Claudette’s Contribution: 0 Claudette’s Yr End: 49,028

2015 Claude’s Contribution: 2,000 Claude’s Yr End Value: 20,872

2030 Claudette’s Contribution: 0 Claudette’s Yr End: 204,801

2030 Claude’s Contribution: 2,000 Claude’s Yr End Value: 157,086

2035 Claudette’s Contribution: 0 Claudette’s Yr End: 329,834

2035 Claude’s Contribution: 2,000 Claude’s Yr End Value: 266,420

2040 Claudette’s Contribution: 0 Claudette’s Yr End: 531,201

2040 Claude’s Contribution: 2,000 Claude’s Yr End Value: 442,503

Claudette’s Total Contribution ( 2001 – 2008 ) is $16,000

Claude’s Total Contribution ( 2009 – 2040 ) is $64,000

Claude put in 4 times the money that Claudette put in, yet Claude has $88,698 less.

Claudette put in a lot less money than Claude, but started 8 years earlier.

Behold the Weakness of Late!

Tags: Debt Destruction, Financial Planning, Wealth Building