Was investing for the future something you always meant to start, but every time you thought about it, you decided to wait until you had a bit more money to set aside? Well you’re not alone, and you’re not too late. The truth is, it’s never too late to start investing.
That’s because no matter when you start investing, your money can grow over time. By starting now, your money will have more time to grow and you will benefit from what is called, compound growth.
What’s compound growth? Well, when you invest, you hope to earn investment income, otherwise known as a return. If you keep investing your returns, along with the money you started out with, these two together can grow over time. This is called compounding.
Take a look at this example.
- Person A — let’s call them YOU — invests $50 a month for 10 years, starting today.
- Person B — let’s call them your know-it-all neighbour — invests the same amount of money, but starts 10 years from now.
- You both invest the same amount of money per month, just starting at different times.
- In 25 years at 6 percent, you would have saved $19,470, and your know-it-all neighbour $10,872.
The only difference here is time, so you can see how it really adds up. Who’s the know-it-all now?
And if you don’t have a lot of extra cash to work with, that’s no reason to put off investing any longer. If you invest small amounts over the coming years, it can really add up. A few dollars now could make a big difference to your future, without making much of an impact on your today.
Contact an RBC representative today to find out what investment options are available to you.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.