Just a few days back, I caught up with a good friend of mine, Spence. He’s a manager for a multinational company and at the same time, he’s got another business providing investment solutions. He’s a wise investor and started investing early.
We were having tea at the Curve and we were discussing ideas on how to prepare for retirement. He shared with me a very important concept about how by investing early, the effect of the compounding interest on your investment can vastly outperform an equal amount of money invested just 5 years later.
For example, RM10K invested annually starting at age 25 vs investing the same amount annually starting at age 30 can result in a difference of about RM146,610 (based on 5% interest) by the time you reach age 50!!
Many people work hard for the money but they have no strategy for money to work hard for them. For some, it is just a lack of knowledge. For others, they don’t have that amount of money to invest in the first place.
This reminds me of Khang Wei. He’s only 20 years old and he was only 19 years old when I started coaching him. He was a school drop-out, having been kicked out of 3 schools. He did not complete his education and had difficulty holding on to a job. He had no paper qualification, no valuable skills and many would write him off as one with no future.
With a bit of guidance and his willingness to implement the business strategies I advised him, he has since accumulated a sizeable amount to invest in property, mutual funds as well as insurance for himself. He is now WAY AHEAD of his peers who are still struggling to make ends meet every month. He now has the means to a brighter financial future….and what a bright future this young man will have! He now has the power of compounding working in his favour because he started EARLY.
