Part 2/7:
To illustrate the reality of investing timelines, let’s consider a practical example. Picture an individual who starts investing £450 per month at age 20 for 40 years at an annual return of 7%. By the time they reach age 60, their investments would grow to around £1 million. But what happens if they delay their start? If they began working on their investment strategy at age 30, their total would drop to approximately £510,000. Starting even later at age 40 would yield only about £221,000.
This data highlights the immense impact of compound interest over an extended period. Yet, it does not imply that starting later places individuals in a hopeless situation.