Clients often ask me if they should wait for rates to increase before they lock in an investment. What I tell them is this – in most instances, taking action is better than NOT taking action.
The power of compound interest
With compound interest, you earn interest on your initial deposit in addition to the accumulated interest from previous periods. This allows your money to grow. Combine this compounding with additional time, and you are taking advantage of your investments. The longer you wait to get started, the more you could potentially be losing in returns.
It doesn't pay to delay
Consider this example that shows the difference of saving $50 per month beginning at age 20 versus waiting until you are 30. Saving that small amount for 10 additional years produces a significantly greater savings by age 65. This is a basic example of the power of compound interest plus time. Now consider if this was $100 or $200 per month and a higher rate of return that comes with investing in stocks, bonds, or mutual funds. Taking action now may yield you much bigger returns than sitting on the sidelines.
|Age||20 Years Old||30 Years Old|
|Value at Age 65||$75,725||$45,839|
Figures quoted are for illustrative purposes only and are not necessarily indicative of the past or future results of any specific investment.
How do I decide?
Don’t lose another day. As the CFS* financial advisor at 1st United Credit Union, I can assist you with managing your risks and achieving your wealth-building goals. Let’s talk - I am available by phone or you can schedule an appointment.
*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the Credit Union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. The Credit Union has contracted with CFS to make non-deposit investment products and services available to Credit Union members. Please consult a qualified tax advisor for specific tax advice.