RESULTING VALUES OF PERIODIC VERSUS ANNUAL CONTRIBUTIONS (S&P 500 TR INDEX JAN 1991 – DEC 2020)
10-year return is 1991-2000, 20-year return is 1991-2010, and 30-year return is 1991-2020. Source: AthenaInvest, Inc. and S&P Dow Jones Indices LLC
The table highlights two investors over a 30-year period. “Annual Annie” who invests $10,000 every year compared to “Later Lucy” who invests $100,000 periodically at the end of every 10 years. Regular contributions benefit from investing earlier and the subsequent compounding. Over longer time periods the results are dramatic with roughly twice the wealth creation for 10-, 20- and 30-year periods.
Rather than worry about if you have “enough” and when it’s “a good time” to invest, you will be better served by simply investing whatever you can as consistently as possible. Behaviorally it is much easier to pay yourself first and learn to live within the funds you have left than it is to sporadically make larger investments in an effort to time the market. It turns out that consistent actions are more important than short-term market conditions in building long term wealth.
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The information provided here is for general informational purposes only and should not be considered an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. It should not be assumed that recommendations of AthenaInvest made herein or in the future will be profitable or will equal the past performance records of any AthenaInvest investment strategy or product. There can be no assurance that future recommendations will achieve comparable results. The author’s opinions may change, without notice, in reaction to shifting economic, market, business, and other conditions. AthenaInvest disclaims any responsibility to update such views. These views may not be relied upon as investment advice or as an indication of trading intent on behalf of any AthenaInvest representative.
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