Ramit Sethi compares two investors: Smart Sally puts $100 a month away for 10 years starting at 25, then stops. Dumb Dan waits until 35 and invests for 30 years. Sally ends up with over $100,000 more, showing how compound interest rewards starting early.
$100 per month.
Starts at age 25 and stops at age 35.
10 years.
Age 35.
About 30 years (from 35 until retirement).
Another example that some of you may have heard about is the person who starts investing age 25, and they put $100 a month away. That's it. $100 a month. Okay. And they invest until 35. Let's call this person Smart Sally. Okay? Smart Sally puts $100 away at 25 and then stops at 35 because she has other things to do. Dumb Dan comes along. Dumb Dan has been saying, I'll do it tomorrow, I'll do it tomorrow. So finally, at 35, he's like, okay, I better do it. So he starts putting $100 a month away. He invests until he retires. So Smart Sally invests for 10 years. Dumb Dan invests for 30 years. Who has more money? Yes. Smart Sally is very smart because she has over $100,000 more. She didn't have to be smarter. She just had to start earlier. We're in our. Let's just say we're in our 20s. If we lose all our money, it's sad. And we go home for a little while, get straightened back up and come back out. Right? If you're 35 and you've got a mortgage and a couple of kids, that becomes a little bit trickier. And if you're 65, I don't know what 65 year olds spend their money on like bingo and pills. When you're in big trouble, you're in big trouble. So the point is, it's okay. You have a higher tolerance for risk than people who are older.
