Turning £100 Into £788
June 23rd, 2006
The Motley Fool has an article showing the power of long-term compounding, showing what £1 would be worth today in real terms, were you to be retiring today and had contributed to your pension over various lengths of time.
£1 invested forty years ago has grown to be worth £7.88, thanks to the power of long-term compounding. However, £1 invested twenty years ago would be worth just £2.83 today, thanks to losing out on twenty years of extra growth… Quite simply, £1 put away forty years ago is roughly equivalent to £6 invested five years ago! So, because the value of your ‘retirement pound’ falls rapidly with age, it makes sense to start saving for retirement as early as you can — ideally, when you start your first real job.
I probably don’t have to say this (but I will) - start saving for your retirement as early as possible.
Categories: Investments, Pensions
1 Comment on “Turning £100 Into £788”
Britons Start Pension At 28 On Average / UK Personal finance blog and money information, tips and links / Money Watch, March 5th, 2007 at 11:18 pm
[...] As with most types of investing and saving, the earlier you can afford to start the better, as you will benefit from the magic of compounding interest. [...]
