We know it can seem tough to put aside any significant contribution to their retirement savings. After all, once you’ve paid rent, your phone bill, utilities, groceries, and a little money saved away in the bank, there’s not much left. And you still need to buy clothes, cover travel expenses and save for that vacation you’d like to take later this year.
What is “Compound Interest”?
The good news is that even a small amount can go a long way over time, especially if you keep adding to it with regular contributions.
When you reinvest your interest (instead of withdrawing it), you will get paid interest on top of the initial deposit and this reinvested money, and this is called “compound interest”.
In the infographic below we follow two people with the same retirement goals and the same income. Notice the difference between starting your savings earlier vs. later.
Could a few small luxuries now stop you from covering both the big items later and enjoying your retirement? Start saving early.