Start as soon as you can

It's always easy to put things off. But one of the best investment decisions you can make is to start investing sooner rather than later. The reason? So you can take advantage of compound interest. Compound interest can turn even small amounts into larger sums over time.

Put compound interest to work for you

Nick At 21, Nick invests a lump sum of $5,000 He adds $1000 pa until he turns 30 He then leaves it alone until he turns 65 Nick's total investment is $14,000 At age 65, he will have $332,413		Amy At 31, Amy puts aside $5,000 She adds $1,000 pa until she turns 65 Amy's total investment is $39,000 (nearly 3 times as much as Nick) At 65 she will have $227,077

Assumptions

This chart is for educational purposes only. It is not representative of any investment product or investment strategy. Figures are based on an average 8% per annum return and zero inflation. No allowance has been made for fees or expenses.

Take advantage of compound interest

Even though Amy has invested nearly three times more money than Nick, she ends up with $105,336 less than him at age 65. Because Nick starts earlier, his investment grows through compound interest. Each time you earn interest, it is added to the principal (or the amount you have invested). The next time interest is calculated, you earn even more interest. The larger the amount you have and the more time you have, the more it grows.

Find out how to get time on your side.

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