What Self-Love and Money Have In Common

There I was, staring at the stock like a deer in headlights. The numbers were intimidating, the price seemed sky-high, and the little voice in my head kept whispering, "Wait for a better time and price." Fast forward a couple of years, and that same stock not only did a 2-for-1 split but also dropped 17% from the point I considered buying. From its low, it soared a staggering 203%. The gains I missed out on by waiting still haunt me.

I can't put an exact dollar figure on what I lost because the amount I would have invested remains hypothetical. However, from a percentage standpoint, I missed out on a golden opportunity to quadruple my money which was also a lesson in the cost of hesitation. The best time to have invested was yesterday, but the second-best time is today. Here's why you can't afford to wait.

The Waiting Game: A Costly Mistake

Investing is like planting a tree. The longer you wait to plant it, the longer it will take to grow. The cost of waiting to invest isn't always apparent immediately. You might not see the impact in a month or even a year. But as the years roll by, the power of compound interest—or lack thereof—becomes glaringly obvious.

Consider this: if two people start a journey and their paths diverge by just one degree, the difference in their travel distance seems negligible over 20 feet. Now, extend that to 2,000 feet, and the difference is around 34 feet. The same principle applies to investing. 

This analogy perfectly illustrates the long-term impact of your investment decisions—or indecisions. The small, seemingly insignificant delay in starting can lead to a massive difference in your financial future. By waiting to invest, you're essentially choosing a path that, over time, will diverge significantly from the one you would have taken by investing sooner. The gap in your financial outcomes could be substantial, as illustrated by the power of compound interest and missed growth opportunities.

The Magic of Compound Interest

Let's talk about compound interest—the investor's best friend. Compound interest is the interest you earn on both the money you’ve saved and the interest you accumulate over time. It's like a snowball rolling down a hill, gaining more snow (interest) as it goes.

Here’s a quick illustration:

• Investor A starts investing $500 a month at age 35.

• Investor B starts investing the same amount at age 40.

By the time they both reach 65, assuming an average annual return of 7%, Investor A would have approximately $606,438, while Investor B would have around $406,058. The cost of waiting those 5 years? Over $200,000.

That’s the magic—and tragedy—of compound interest.

Dollar-Cost Averaging: Your Safety Net

One strategy that could have mitigated my fear of investing at the wrong time is dollar-cost averaging (DCA). This strategy involves consistently investing a fixed amount of money at regular intervals, regardless of the stock price. By doing this, you buy more shares when prices are low and fewer when prices are high, averaging out the cost of your investments over time.

For instance, if you had invested $500 per month in the stock market over the past decade, you’d have bought shares at various price points. Some months you’d pay more, some less, but overall, you'd smooth out the highs and lows. The key is consistency and sticking to the plan, no matter what the market is doing.

Conclusion: Start Now and Stay the Course

At this point, you might be wondering, “How do I get started?” or “Is my current portfolio optimised for long-term growth?” Don’t worry—we’ve got you covered.

Schedule an appointment with us today to review your investments and ensure you’re set up to win in the long term, not just the short term.

Remember, the best time to start investing was yesterday. The second-best time is today. Don’t let the cost of waiting rob you of your financial future. Investing is a long-term game and it's about weathering the storms and celebrating the sunny days. It’s not about timing the market; it’s about time in the market. Take action now by reaching out to us to set yourself on the path to financial success.

By taking action now, you're not just investing in the stock market—you're investing in yourself. That’s self-love.