Close this search box.
Ivan Fletcher

How Much of a Difference Does Starting Sooner Make?

Written by Ivan Fletcher

We often hear the message that it’s ‘time in the market’ not ‘timing the market’.

Well today I thought I would demonstrate the impact of starting sooner than later (ie more time in the market).

This example compares 2 young individuals –  Bruno the Baker and Billy the barman.

Bruno is an early starter in both his job and his investing.
Billy starts later with both his job and his investing.

Bruno opens an investment account at age 19 and for eight consecutive years invests $2,000 into the share market and then stops investing.  He earns an average return of 9% p.a.  

Billy – makes no contributions until age 26 and then starts contributing at the same rate of $2,000 every year for the next 25 years until age 65 at the same average return of 9% p.a.


Bruno increases his initial investment by 10.9 times what he invested

Billy increases his initial investment by 2.7 times what he invested. 

Despite the fact that Bruno stopped investing after eight years he was still better off by age 50 than Billy who invested much more over time but started a little later.

The difference is the power of compounding your return for longer.

The table below demonstrates the year-by-year balance.

Book a FREE 15 minute meeting

Plant a tree with us today, to sit in the shade in the future.

More From Hudson Financial

Understanding the Benefits of Lenders Mortgage Insurance (LMI) – Why paying LMI might be the best financial decision you ever make!

What often gets overlooked is the significant advantages that come with embracing Lenders Mortgage Insurance (LMI). In this article, we'll delve into why viewing LMI...

Considering Buying a Commercial Property for Your Business or Wanting to Transfer One to a Self-Managed Super Fund (SMSF)? The Pros and Cons of Owning a Commercial Building within a SMSF.

Congratulations, your business is reaching the size and profitability to consider buying your own commercial business premises! Maybe you own your business premises already and...

Share Market Update April 2024

The upward trend in the US markets that began in November 2023 appears to finally be coming to an end, with the SP500 falling nearly...
Scroll to Top