Time is Money: Get Started Now

Over the past two years, I’ve forged a friendship with a decades-younger member of the opposite gender. It’s clear from our talks that she views me as a mentor. And I’m proud to say she’s my mentee, because someone who’d avidly seek a friend decades older is one with a refreshingly different approach to life.

If there’s a nugget that I’d love to pass on as an age-old Nestor, it’s the value of having a few bucks in the bank. I tell her, sure, you’re doing well in your career, there’s demand for your services, and your earning potential appears limitless.

But let’s step into the time tunnel and saunter 25 years forward. Can you dig the fact that you may find yourself at 55 working for a boss who today is in sixth grade, but a quarter century hence may feel an aversion to older workers?

Or that your salary on that future day might make you vulnerable to being replaced by two fresh-faced staffers who emerged from the womb this very year?

And that once replaced, you may not find the kind of welcoming job market you enjoy at the age of 30? And that you may have to strike out with your own business, or take the less-enticing job offers, with the more meager remunerations, that are often the lot of the older worker?

I recently talked with Grace Jenkins, the Chicago-based president and CEO of National Able Network, formerly Operation Able, which among its roles trains older folks who want to stay in the workforce. She told me older workers who are laid off are more likely to work at a lower level in the next job. Those between 50 and 61 average a 20 percent pay cut in the next position, and those 62 and older are hammered with wage cuts of 36 percent on average. Could this situation be different 25 years from now? Maybe. But why take the chance?

My friend tells me she’s not the type to place a huge emphasis on cash. But you don’t have to be money hungry to be spurred by the very human desire for intangibles money buys, like independence and freedom of choice. In a world where freedom almost always boils down to financial independence, there’s one reality that will ensure that lifestyle flexibility. And that’s peering into your savings account and finding not $938, but a slightly downsized version of Ft. Knox.

Folks of my parents’ generation in the ’40s called it “screw you money.”

Only the word they used wasn’t “screw.”

The value of this grubstake of greenbacks can’t be measured in dollars and cents. It’s the bounty of bucks that lets you tell that clueless boss who can’t find either of his buttocks with both hands behind his back where to stick it. It’s the stash of cash that allows you to take time off and mull your options.

It’s the fount of funds that enables you to start a business and watch it take root and flourish. It’s the wheelbarrow of dinero that permits you the time and tuition to be retrained in a field you’ve always had a passion for.

And if you’ve done your job really well, it’s the mound of moolah that just might make it possible for you to thumb your nose at the notion of working at all.

So here’s the payoff on this posting’s title. By the time most people are in their 50s and wishing they’d stacked up such a load of loot, they’ve blown the opportunity to do so with near-effortless ease. For it is those early years of piggy-banking – not the later ones – that pay off so amazingly.

In other words, your youth is likely the greatest asset you’ll ever have in building a fortune. Yeah, you’ve heard forever that compounding is the eighth wonder of the world. But why not tune in just once more? Using the compound interest calculator at Geek Hideout, you’ll learn that $1, 000 invested at age 30 in an index fund paying 10%, then added to at a rate of $300 a month, will grow to almost $1.2 million by 65. But if you delay launching the same savings program until age 40, you end up with just $410, 000.

That added $36, 000 you put in during your 30s? It tucks a tidy three-quarters of a million into your nestegg. Sound good? Hey, what’s a mentor for, anyway?