This example is going to assume you are at least 18 years old. If you are younger, that is great, but you will have to go to your bank with your parents to open an Informal Trust Account . Also, by way of example, I am going to use the Ontario minimum wage of $11.40 per hour (minimum wage varies by province).
Now remember, in order to start to become a successful investor, you need to spend less than you make, (TheAnswerIs HERE) . Also, you will need to give yourself the GIFT. of investment knowledge, i.e., Gratitude, Investment Costs, Focus on Discipline and Time, (TheAnswerIs HERE) And finally, you will need a job that pays you at least minimum wage.
You need to put aside and forget about $11.40 per week. That is only one hour of pay per week, which is only 2.5% of your total pay (1 hour out of 40 hours per week).
If you put aside $11.40 per week for 52 weeks, you will have $592.80 after one year, to purchase your first investment.
If you earn 10% per year on your investments and you repeat this action for 40 years, you will have $262,369! That’s more than a quarter million dollars.
If you continue for 50 years, i.e., when you turn 68, you will have $689,965. Wowsa!
I know, I know, 40 or 50 years is forever away! But remember the average life span is now 85 years old, and climbing.
But I digress, back to the example. So, of this $689,965, how much did you actually contribute? You contributed just $29,640, ($592.80 x 50). Time and returns (i.e., "Mankind’s Greatest Discovery", compound interest – see Investment Piece #1, did the rest!
Given the current relatively expensive state of the equity markets, it is quite arguable that a return of 10% per year is too aggressive an expectation. This may very well be true today, but that can also change quickly and dramatically if the equity markets were to have a 2008 type of sell off.
Since no one can accurately predict the direction of the equity market, waiting on the sidelines for an “opportune time” to invest is rarely a good strategy. No one is going to put up a big sign that says it is now ok to invest in equites.
If you were only able to achieve a long-term average return of 7% per year, instead of 10%, on your all equity portfolio, when you turn 68, your $11.40 per week would have turned into $240,990. i.e. almost a quarter of a million dollars!
No Excuses!! Take control of your financial liberty.
Also, learn about the government pensions that you are entitled to receive:
So you see, even though you make minimum wage, with a plan, you will have money!