Simon’s Notes

Today I finally opened up my mutual fund portfolio. I’ve been wanting to do this for quite some time now, but somehow something always comes up. Now that I’ve done it, I feel very happy and slightly relieved, my only regret was that I didn’t do it sooner.

Some of you might be thinking ‘who cares, whats a few extra months anyway?’ In an earlier post entitled ‘the 8th wonder of the world‘, I talk a bit about compound interest, and I give an example of how wasting a few extra dollars per month could end up costing you thousands of future dollars. A habit that’s so much harder to break than wasting a few extra dollars is the habit of wasting time, procrastination. Yes procrastination can eat more money than your credit card. I’ll use myself as an example.

I’ve been wanting to open my investment portfolio for about two years now, but something always seems to come up (bad excuse, big mistake). I’m being debited on a monthly basis into my investment account for the equivalent of about 70 dollars and I’m sure I can grow my investment at 20% per anum at least. If I wanted to withdraw my investment when I turn 40, that means I would’ve had 20 years to invest if I started 2 years ago, but since I’m only starting now that means I have 18 years left.

So what do we have so far, I’m investing 70 dollars per month at 20% per anum, and I would’ve had 20 years but since I started late I only have 18. If I had started when I should have, which was two years ago, my investment would be at about $220,000 with a total investment of only 16,800 by the time I turn 40. But since I’m only starting now, by the time I’m 40 my investment will have grown to about $145,000 with an investment of about $15,120.

So lets see how much my procrastination has cost me. I would have made $75,000 more by the time I’m 40 if I had started 2 years ago, now minus the difference in how much I put in, it comes down to about $73,320. So in the last 2 years I’ve thrown away 73,320 dollars, thats 36,600 dollars a year, 3,050 dollars a month, or 100 dollars a day. If I decide to wait and take out when I’m 50, I will have thrown away 722 dollars a day for the past 2 years. And if I decide to wait even longer till I’m 60, my ‘throw away’ expense for the past 2 years will amount to 5,416 dollars every day, I just spent the last 2 years throwing away 3,900,000 future dollars. Now I’m sad.

Procrastination is expensive.

Simon

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Filed under: Money and Finances by Simon Rodrigues