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Investing now for retirement pays off later

Bill Boyer

Issue date: 10/29/10 Section: News
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The years in your early 20s are the best time to set yourself up for financial independence later. You don't necessarily need a large amount of start up money; if you invest only $50 per month into an investment account earning eight percent, after five years you will have $3673.
The years in your early 20s are the best time to set yourself up for financial independence later. You don't necessarily need a large amount of start up money; if you invest only $50 per month into an investment account earning eight percent, after five years you will have $3673.
[Click to enlarge]
When I opened an IRA (Individual Retirement Account) a friend posed the question, "You're saving for retirement now? Why? You're in college." I responded simply, "I want to be rich."

Do you want to be rich? Of course you do. Everybody does. Why is it then that so few young people invest their money at all? Many claim that they lack money to invest, do not know how to choose investments, or are generally afraid of the stock market.

Fortunately for you, none of these arguments are valid. You can start investing money right now. Investing for retirement is the single best way to become rich. So either get busy inventing the next Facebook or learn how to invest. The decision is yours.

Many young people decide against investing money because they think they do not have enough money. In reality, you only need $50 to start saving for retirement. People also worry about not knowing how to choose investments and are therefore too frightened to think about investing. Luckily, investing is not about picking stocks and can be done with very little research. Many young people recently watched their parents' retirement accounts shrink, which is certainly another reason to be hesitant. However, a better way to perceive this situation is that there has never been a better time to buy investments because they are basically on sale.

Many people, hearing that they could start investing with only $50 might scoff at the small amount, and think that it is not worth the trouble. Consider this: if you invest only $50 per month into an investment account earning eight percent, after five years you will have $3673. The years in your early 20s are the best possible time to set yourself up for financial independence later. If you think there is no way that you can afford this now, begin immediately after college instead of buying a new car or a fancy apartment. Those items are luxuries. Being financially independent is a much better luxury.
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Issue Summary

News

  • Crime reignites emphasis on campus safety
  • Election day survival kit
  • Inamori International center for ethics and excellence hosts international peace and war summit
  • Investing now for retirement pays off later
  • Snyder praises university accomplishments

Sports

  • 2010 UAA cross country championship preview
  • CWRU XC looks to dominate in UAA championship
  • Hockey picks up first win against CalU
  • No. 23 Spartans take home Baird Bros. Trophy
  • Seniors thump Westminster 6-0 in final home game
  • Spartans trump top-ranked WashU, return home for win on senior day.

Opinion

  • Democracy: the only class where participation is 100 percent of your grade
  • Editorial: Three times (not) a charm
  • What's Scarier than Pelosi & a Boehner? Not Much, Actually.

Focus

  • Case Western: Zombieland
  • Dim and Den Sum: Cleveland's meal on wheels phenomenon
  • Footlighters aim for Thoroughly Modern performance of Millie
  • K'naan enthralls concertgoers courtesy of UPB
  • Playhouse Square's Legally Blonde offers surprisingly enjoyable escapist fare
  • Shaking things up
  • Small, yet dedicated group of materials science majors represent CWRU at convention in Houston
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