The Opportunity Cost of Not Investing Now

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    The High Cost of NOT Investing NOW

    1. Syed says:

      It’s shocking to see how many of my colleagues, some of them very well paid, are not investing into their 401k’s or anywhere else. You’re leaving so much on the table in the form of potential tax savings, dividends, and of course, appreciation.

      My advice to them is to make it a habit by just making an automatic deduction every so often. You won’t feel it too bad in your day to day finances.

    2. So important to start as early as possible and take advantage of compound interest. Even if you start with a small amount and increase it over time. Its advice I’m giving to my three teenage children. I want them to understand the importance of saving and investing early.

    3. Great post, Stefanie! I’m constantly having conversations like this with friends. Even investing $25 a month can grow faster than we think.

      • Stefanie says:

        I feel like I have that conversation with people all the time and nothing changes. So frustrating. That’s why I pulled out the numbers today 🙂

    4. Very interesting post Stefanie. I love running the numbers through a compound interest table and seeing how much a particular strategy might equate to down the road. Cool YouTube channel to btw. Just subbed!

    5. Haha you use Vanguard’s performance calculation feature too. Only wish it was more robust. I showed my mom her accounts the other day and she asked what happened with the latest dip, and I got to explain what the Brexit was.

    6. Not only are you not gaining as much by saving instead of investing, but factor in inflation, and all that money in your savings account is actually costing you buying power. Unfortunately, a lot of people don’t understand that concept just as they don’t get what compound interest can do for you. If you’re saving for a big ticket purchase (i.e. a house), then yes, I understand throwing huge sums into savings. But having it there just as a safety net (on top of your emergency fund) isn’t the way to go. Love this post!

      • Stefanie says:

        Exactly! It’s sad when savings can’t outpace inflation, but that’s the reality we live in. Thank goodness we have investing as a tool! It’s just too bad more people aren’t using it 🙁

    7. Taous says:

      When you say investing are you referring to retirement accounts or a taxable account?

    8. Great post! I think so many millennials shy away from investing because they think they have to pick stocks or it’s complicated. I started investing in my 401k for the tax deduction years ago. So glad I did!

      • Stefanie says:

        Agreed. I think most people associate investing with stock picking, risk, and overblown hollywood portrayals of wall street. What they don’t think about is the accessible, low cost and simple 401k contribution or index fund within a ROTH IRA.

    9. This is a fresh reminder that investing is SO important. I tell my readers and clients to pay off your debt and build an emergency fund, but after that, it’s time to invest!!

    10. ESI Money says:

      Probably the biggest financial mistake of my life was not investing right out of college.

      I waited 5-7 years before I got my act together and started saving/investing, but if I had started earlier those early dollars would now be worth a fortune (25 years later).

      I still did well over the next two decades, but could have done much better if I had started earlier. Don’t put it off!!!

      • Stefanie says:

        The sooner, the better for sure, but still great you started as soon as you did. I have many peers, now in their 30s, still not investing :/

    11. Great post. Even the smallest amount gets you into the habit, then raise it when you get pay raises.. We should show this post to all young relatives, friends, colleagues who’re on the fence about investing!

    12. TJ says:

      I have some co-workers in their 40s who will openly talk about how they keep their 401(k) in a money market account. They’re so worried about any chance of losing money, but they’ve lost out on so much potential growth in the last five years alone. They probably could have thrown darts at the fund and still have more in their 401(k) then what they have now..

      I definitely grew up in an environment that was on the financial savvy side, but everything I learned about the investing side of finance was through books and the internet after I graduated from college, I wouldn’t be surprised if there’s a lot of other millennials like that because investing talk can still be taboo even in families. I was taught to pay my credit card bills on time and to appreciate the value of a dollar, but investing strategy tips? We definitely were never that kind of family.

      Fantastic post, and I would agree, anyone with a long time horizon should probably be in equities all the way, though I understand the appeal of going with a balanced fund to mask the volatility some, I recently saw a quote that I liked:” sub-optimal plan that can be followed is much better than the the optimal plan that you can’t stick with.”

      Right now, my biggest concern is to figure out how much to pull out of my long term portfolio to keep around as safety with the absence of knowing what sort of income I will be bringing in in addition to dividends after I (temporarily?) pull the W2 plug.

      • Stefanie says:

        Instead of pulling anything out of the long term portfolio, I would start saving aggressively in accessible, liquid accounts until you feel you have enough to pull the W2 plug. Ideally, your long-term investments are left to grow until retirement.

    13. The problem is that at the beginning you have so little to invest, you don’t really see the benefit.

      It takes a while to realise that investing a little for a long time is better than investing a lot for a shorter time…

    14. […] Investing grows your money in a way that savings cannot match. stefanieoconnell…. […]

    15. […] Investing grows your money in a way that savings cannot match. stefanieoconnell…. […]

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