Quote:
Originally Posted by MiddleAgedAl
Mathematically speaking, the highlighted text is the understatement of the year.
William and James are theoretical twin brothers who are 65 years old today.
At the age of 20, William started an IRA, and put 2K in at the end of the year. After 20 years of annual contributions, he stopped new contributions altogether at the age of 40, and left the funds in that IRA. For the last 25 years, he's been spending that 2K on beer instead of savings.
James was spending that money on beer from the age of 20, and only stopped doing so, and started putting that money into his own IRA when he reached the age of 40 (same time that William quit). He contributed the same $2K per year for 25 years, making his last contribution today. Of course that means that James invested 25% more money in total than William.
What are the values of William’s and James’s IRA funds today, assuming both were the same fund, and earned a consistent 10% ?
William, who contributed from age 20 to 40, then stopped, has $1,365,227.
James, who contributed from 40-65, putting in 25% more money, has $218,364.
The defense rests.
http://www.getrichslowly.org/blog/20...ors-the-young/ |
If I didn't know any better, I'd think you were like me.....thinking and planning for retirement 40+ hours a week.
