Value of Starting Early
Time is on your Side.
By starting your investment plan early, you give your money more time to grow. Your investment earnings, if any, can compound year after year which can provide you momentum toward your goals. The following hypothetical example illustrates the power of compounding – and how starting early can make a big difference.
Let’s say Mary began investing $1,000 each year, starting at age 20, and stopped at age 30, after contributing $10,000 over the 10-year period.
John began investing later — starting at age 35 he invested $1,000 every year for the next 20 years for a total investment of $20,000.
Although Mary has contributed half as much as John, and assuming both earned a 7% fixed annual rate of return, at age 55 her account was worth 83% more than his.
Starting Early Can Make A Big Difference
This example is for illustrative purposes only and does not represent the performance of any Franklin Templeton fund. The table assumes a 7% fixed annual rate of return compounded monthly and no fluctuation in principal. Investment return and principal value of an investment in a Franklin Templeton fund will fluctuate with market conditions and you may have a gain or loss when you sell your shares. Contributions are made on birthdates.
