What’s the worst thing that could happen if you went totally broke today? This is not a rhetorical question. Take a few seconds to answer it before you read further.
What’s the very worst thing that could happen if you went dead broke today? Think about it for ten seconds.
For most people our age, the answer is something like: “A lot would happen, but it would not totally destroy me.” Why? Because when you’re in your early to mid-twenties, let’s face it— being broke happens, a lot.
And we survive it, because we are still young, with few responsibilities beyond ourselves. The most that would happen is that you move back in with your parents, spend a week thinking about your life, get over it and move on.
Taking Risks
Consider the life of a guy in his thirties. He is probably married with kids or a baby-on-the-way. He has to pay for family food, rent, school fees for his kids, medical expenses for his wife and kids, clothes for his kids, PHCN (or whatever) bills, car fuel, generator fuel, little snacks his kids like, car maintenance and on and on.
Going broke at this time is a disaster.
That’s why the best time to take risks is now.
Life is never going to be easier than this. You will never have more energy than right now. For many of us, we are in the best physical shape of our lives. We don’t have arthritis, severe back pain or any of the health problems older people face.
It will never be easier than now.
The best part of being young is that we have more time on our hands than we’ll ever have. Once you get married, visiting friends becomes a luxury. Your kids fill up your time and thoughts, almost completely. Is that when you want to start your dream business?
Investing For the Future
These are the best years to accumulate compound interest on a retirement investment. The easiest way for most people to get rich is to start early. The time and money we have in our twenties is extremely valuable. Most people who are rich and comfortable in their thirties are that way because of the decisions they made in their twenties. In his book, The Slight Edge, Jeff Olson shows this better than anyone else I’ve read or listened to:
Let’s say you and your best friend are both twenty-four years old. You both […] decide [to put] away $2000 a year into an IRA, so you’ll retire at age sixty-five with over a million dollars.
Your friend starts doing it now.
You wait. You don’t get around to it this year, or next, or the next. In fact you procrastinate for the next six years.
At the beginning of year seven, you ask your friend how his IRA is doing. You are stunned when he tells you that he has finished. After investing $2000 a year for six years at 12%, he’s all set. By the age of sixty-five, the little financial ball he started rolling would have snowballed into over one million dollars, even if he never puts in another penny.
“That’s it,” you decide, it’s time for action. You start putting in your $2000 each year. How many years will it take before you’ve caught up to your friend? In other words by what age will you be able to stop investing your annual $2000 like he did? You can’t believe your eyes when you see the answer.
You’re going to have to keep investing that $2000 every single year until the age of sixty-two. Your six years of procrastination have cost you thirty-three years of investing. That’s twenty-seven more years and $54,000 dollars more invested just to arrive at the same place.
[Note from Uchendu: Naturally, I was shocked at this. So I checked out the numbers myself. They’re correct. You can do this yourself using Financial Calculator app on Android. Set compounding to “Quarterly”.]
Now think of our parents, who live in a time when the Federal Government has handed over pensions to private firms. Some of them didn’t start their pension contribution on time. When they retire, their monthly pension from such firms will be too little for them to live comfortably.
It’s not a beautiful situation.
But we can have a different future if we start now.
What’s the very worst thing that could happen if you went dead broke today? Think about it for ten seconds.
For most people our age, the answer is something like: “A lot would happen, but it would not totally destroy me.” Why? Because when you’re in your early to mid-twenties, let’s face it— being broke happens, a lot.
And we survive it, because we are still young, with few responsibilities beyond ourselves. The most that would happen is that you move back in with your parents, spend a week thinking about your life, get over it and move on.
Taking Risks
Consider the life of a guy in his thirties. He is probably married with kids or a baby-on-the-way. He has to pay for family food, rent, school fees for his kids, medical expenses for his wife and kids, clothes for his kids, PHCN (or whatever) bills, car fuel, generator fuel, little snacks his kids like, car maintenance and on and on.
Going broke at this time is a disaster.
That’s why the best time to take risks is now.
Life is never going to be easier than this. You will never have more energy than right now. For many of us, we are in the best physical shape of our lives. We don’t have arthritis, severe back pain or any of the health problems older people face.
It will never be easier than now.
The best part of being young is that we have more time on our hands than we’ll ever have. Once you get married, visiting friends becomes a luxury. Your kids fill up your time and thoughts, almost completely. Is that when you want to start your dream business?
Investing For the Future
These are the best years to accumulate compound interest on a retirement investment. The easiest way for most people to get rich is to start early. The time and money we have in our twenties is extremely valuable. Most people who are rich and comfortable in their thirties are that way because of the decisions they made in their twenties. In his book, The Slight Edge, Jeff Olson shows this better than anyone else I’ve read or listened to:
Let’s say you and your best friend are both twenty-four years old. You both […] decide [to put] away $2000 a year into an IRA, so you’ll retire at age sixty-five with over a million dollars.
Your friend starts doing it now.
You wait. You don’t get around to it this year, or next, or the next. In fact you procrastinate for the next six years.
At the beginning of year seven, you ask your friend how his IRA is doing. You are stunned when he tells you that he has finished. After investing $2000 a year for six years at 12%, he’s all set. By the age of sixty-five, the little financial ball he started rolling would have snowballed into over one million dollars, even if he never puts in another penny.
“That’s it,” you decide, it’s time for action. You start putting in your $2000 each year. How many years will it take before you’ve caught up to your friend? In other words by what age will you be able to stop investing your annual $2000 like he did? You can’t believe your eyes when you see the answer.
You’re going to have to keep investing that $2000 every single year until the age of sixty-two. Your six years of procrastination have cost you thirty-three years of investing. That’s twenty-seven more years and $54,000 dollars more invested just to arrive at the same place.
[Note from Uchendu: Naturally, I was shocked at this. So I checked out the numbers myself. They’re correct. You can do this yourself using Financial Calculator app on Android. Set compounding to “Quarterly”.]
Now think of our parents, who live in a time when the Federal Government has handed over pensions to private firms. Some of them didn’t start their pension contribution on time. When they retire, their monthly pension from such firms will be too little for them to live comfortably.
It’s not a beautiful situation.
But we can have a different future if we start now.
Written by Uchendu E. Uchendu
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Uchendu E. Uchendu started training people when he was 12 years old. He writes at uchendutalks.com. If you like this article, you can find his best articles here and join his email list here.
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Uchendu E. Uchendu started training people when he was 12 years old. He writes at uchendutalks.com. If you like this article, you can find his best articles here and join his email list here.
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