If you put $10,000 into an account and left it to grow for 40 years, assuming an average return per year of 8%, you would end up with over $217,000. But if you procrastinated 10 years, you would need to begin with $20,000 — twice as much — to barely get close to that same result.
Is it enough to just know that fact? Though we may all recognize that saving today is better than waiting until tomorrow, action is the key component. Wealthy people make lifetime saving a priority – they are disciplined to stay the course. They don’t give into temptations as an excuse to forgo saving to purchase a new car or a second home – the purchase waits. The saving habit of wealthy people is a commitment and it is never a second priority no matter what the situation.
So should you start small? That’s better than not saving at all … but if you want to be rich, you have to save like you mean it. And that means contributing the maximum amount to your 401(k) and then saving even more. You may have heard the advice to always save 10% of your income. That is good advice. Unfortunately, it is rarely done by the masses. Creating wealth is a habit that starts young and doesn’t quit.