Time Is Your Superpower

The story: Jade and Sam race to 65

Jade and Sam compare two growth bars, and Jade’s early start makes Jade’s bar much taller.

1. Narrator: Jade starts investing $50 a month (example) at 15. Sam puts in the same amount, but waits until 25.
2. Sam: Ten years isn’t a big deal. I’ll catch up later.
3. Narrator: Growth earns more growth. The earliest dollars get the most years to snowball.
4. Narrator: At an example 6% a year, both keep going until 65. Here’s how they end up.
5. Sam: Jade put in $6,000 more than I did, but ended with nearly twice as much?
6. Narrator: Those first 10 years did the heavy lifting. Waiting cost Sam growth, not just deposits.
7. Narrator: Start small, start now. And remember: projections are estimates, not promises.

What you’ll learn

1. Growth builds on itself

   Compounding means your growth earns more growth. The longer money stays invested, the bigger each year’s gain can get. That’s why the last years of a long stretch often grow the most.

2. The rule of 72

   To estimate how many years money takes to double, divide 72 by the yearly growth rate. It’s a quick estimate, not an exact answer.

   Example: at 6% a year, 72 ÷ 6 = about 12 years to double.

3. Small and steady adds up

   Small, regular amounts, like a slice of each paycheck, can grow into a lot over decades. Starting small now often beats starting bigger years later.

4. Projections are not promises

   A projection is an estimate of the future, based on an assumed rate. Real returns go up and down, and some years lose money. Projections help compare choices, not predict exact results.

Key words

rule of 72

72 ÷ the yearly rate ≈ the years it takes money to double

projection

an estimate of the future, not a promise

Common questions

What rate should I assume?

No one knows future returns. Many people try a few rates, low and high, to see a range. The examples here are labeled and made up.

Remember this

Start small, start now.

Try it: Run the sample teen’s numbers

1. Open the retirement calculator linked in this lesson.
2. Enter the sample teen: current age 18, $50 a month, an assumed 6% yearly return (example).
3. Run it again with current age 28. Compare the two estimates.

Run the sample teen through the retirement calculator embed.

Live facts

Numbers that change over time, with when they were last checked and where they come from.

• Compound interest calculator

  Source: Investor.gov (SEC)(opens in a new tab)