You Might Be Richer Than Me, Even If I Have a Greater Net Worth

So.  Are you richer than me?

You might be.  In fact, many folks are, but I might also be richer than others who have a greater Net Worth than I do.

WHAT??!!  Shin, how is this?

Well, since you’ve ventured this far, I’m gonna spill the beans.  If you’re younger than me, you are richer.  You have more time to make things happen than I do.  Well, barring any unexpected endings.  If we both live to 95, you are richer than me as I’m 56 and I’m only 39 years away from 95.

Let’s look at some things.  I’m a late Baby Boomer, as I was born between the years 1946 and 1964, 1960 to be exact.  Millennials are said to have been born in the early 80’s to 2000.  Millennials have had the benefit of the Inter-Web longer than my generations.  So Millennials will have the opportunity learn SO much more on that web than us older folk.  In my day, all research had to be done at the library, using the Dewi Decimal card catalog system, only when the library is open.

Now days the “Library” is always open, and one doesn’t even have to search for information.  Take Mike Kineman‘s article “7 Money Rules for Millennials,” it was “Fed” to me through Twitter, via David Carlson’s blog, Young Adult Money.  I wasn’t looking for the article, but it found me. Cool, huh???!!!

Another great article that came my way is “How Smart Are You With Your Money?,”   This one came to me from SuperMillennial, also through Twitter, via a Tweet by Rockstar Finance.  This article is a great one about tracking Net Worth, which everybody should do regularly, like J. Money at BudgetsAreSexy says.  (I do too, J. $$)  Oh, I oughta do a post on calculating Net Worth.  Yep, gonna make a note on that one.

Okay, so far all I’ve given you is my sob story about not having the Inter-Web.  Big deal.  Wait, the biggy is the fact that anyone younger than me should have more time to do great stuff, like INVEST!!  Let’s say you’re 30 and I’m 56, and we’re both going to start investing tomorrow.

We’re both going to invest until we are 65, both with an initial investment of $1000, and a monthly investment of $250 a month, at an average return of 6%.  If you’re 30, you’ll be investing for 35 years.  I’m 56, so I’ll be investing for 9 years.  Here’s what we get using an online investment calculator. (Wish I had one when I was thirty, I had to build my own.  Snif, Snif)

• Thirty-Year-Old – $362,048.68 at the age of 65.  That’s $362,048.68 after investing $106,000.  That’s earnings of $256,048.68.  Did you catch that???  That’s earnings of $256,048.68!!!!  That’s an average annual earning of $7316.67, with an investment that is only 29.28% of the total fund when the owner is 65.  That’s Money Making Money, Baby!!!
• Me, The 56 Year Old – $38,231.85 at the age of 65.  In my situation, my investment would have been $27,000, with earnings of only $11,231.85.  Yeah, I would make money, but not more than my investment and nowhere near what the 35-year-old would make.  In my situation, my investment would be 29.38%.

Huh???  In both situations, our investments are almost the same, just a bit over 29%, BUT the Thirty-Five-Year old has a Ship-Ton load more money by 65.  It’s all about the timeline and compounding growth.

Time is the actually the treasure in this story.  The more time you have, if you will use it, the more growth you can have.

Here’s some firms to get started in investing:

• Vanguard
• Fidelity
• Betterment
• TD Ameritrade

Now, the time thing is not all about investing.  Younger people have more time to write books, build businesses, blogs, etc.  Time is the most valuable commodity that everybody has.

So, now that you know about the most valuable treasure, what are you going to do with it?