Why is it important to invest your money? Money invested for the long term will pay big in returns. If you put the consistency in investing monthly, it can create a ton of growth. Even if you can’t invest a lot, it is important to let time be on your side and invest something as soon as possible. This article will show how important investing is and how beneficial compounding interest can be. The charts below will show three separate people and what they are projected to earn in their retirement investment.
Let’s get right into it
| Investment | 25-year-old Carpenter |
| Starting Amount | $0 |
| Years | 40 yr (25-65) |
| Rate of Return | 8% |
| Contribution (monthly) | $300 |
| Total Contribution | $144,000 |
| Total Interest | $911,168 |
| Total | $1,055,000 |
| Investment | 35-year-old Plumber |
| Starting Amount | $0 |
| Years | 30 yr (35-65) |
| Rate of Return | 8% |
| Contribution (monthly) | $300 |
| Total Contribution | $108,000 |
| Total Interest | $341,460 |
| Total | $449,460 |
| Investment | 35-year-old Electrician |
| Starting Amount | $0 |
| Years | 30 yr (35-65) |
| Rate of Return | 8% |
| Contribution (monthly) | $700 |
| Total Contribution | $252,000 |
| Total Interest | $796,741 |
| Total | $1,048,000 |
Findings
The charts above show the effects of time and compounding. The first chart shows a 25-year-old carpenter that starts investing $300 a month. With a conservative 8% return, they should be able to have a million dollars by the time they are 65 years old. They would have only invested $144,000 over the 40 years with the rest being the interest earned. The idea is that you will be able to live off the interest your money earns. If your money makes 10%, then your million dollars will give off $100,000 a year.
The next chart shows a plumber who waited just ten years later when they are 35 years old to invest the same $300 a month. They would only accumulate half as much money by just waiting 10 years. The point is that you need to start investing as soon as you are in a stable financial position. Acquiring wealth through compounding should get you excited for the future. This excitement should also encourage you to make the right steps today to get you to a stable position so you can invest. The last chart shows an electrician who waited till 35 years old as well to start investing. They would need to invest $700 a month instead of $300 to reach a million dollars. Although it is still possible to achieve the one-million-dollar mark, you will have to invest twice as much money to do so.
Final Thoughts
I believe no matter what situation you are in, you can acquire wealth and live the life you are called to live. Every blue-collar worker out there that is working hard day in and day out has the ability to save a million dollars or even more. Just like how a wave crashes on a rock constantly, you need to consistently invest to see the gains. You will not see the rock change immediately from the crashing waves. It takes years of constant crashing waves to eventually change the form of the rock. If you want to change your life as well as the life of future generations, then start being a wave. Create positive financial habits to acquire wealth. I want to bring this information to you so you can become confident that you can acquire wealth as a blue-collar worker. With the right plan that is consistently executed each month, you can achieve your goals and live your best life.