Generation Y

The early bird catches the biggest worm

When it comes to planning for long-term goals unfortunately many Gen Y's put off doing something now. However, if you’re prepared to start investing early, time can be a powerful ally.

This is because year after year, the money you invest has the potential to earn more money. And if you re-invest earnings, you’ll have even more in the future. This is known as compounding and it’s what Albert Einstein called the eighth wonder of the world.

For example, if you invested $50,000 today, earned 7% per annum and re-invested your earnings, in 20 years you’d have around $200,000 (before tax). But, if you waited ten years before making the same investment, in 20 years from now, you’d only have around $100,000.

That’s an extra $100,000, or double the amount, simply by investing ten years earlier.

To maximise the results, you may want to consider starting right now, to capture the compounding effect over time.

See FDFL's Wealth Creation service.