Compound interest.. from little things big things grow

Compound interest – the sooner you start, the more you’ll have.

Forget about location, location, location being the key to a good investment outcome.  One of the most important ingredients to financial planning success is being regular, regular, regular!

A regular savings plan can turn small amounts of money into a sum that can take you closer to your dreams much faster. All that’s needed is time and discipline.

For example, let’s see what happens to an investment starting with just $100 and adding $100 each week from your regular income. The table below shows what the investment value would reach after five years and up to thirty years. In this example, we have assumed that the investment pays a return of 6% per annum (paid quarterly) and that this return is reinvested.

The results show that a regular savings habit can turn small sacrifices into real outcomes.  Demonstrating the effect of time and compounding returns on the value of your investment.

The trick is to start soon.

Everyone’s ability to save is different, but even if you can’t save $100 every week, the above figures are still worthy of your attention. For example, if you can save $50 per week simply halve the results. Conversely, if your savings capacity is higher, multiply the results.

Want more information?
SMSF Retirement Planning
Investing for Income when Interest Rates are Low
Why it Pays to Understand the Six Stages of Financial Planning

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