Number of years	Keep it in your mattress	Keep it in your checking (.25% interest)	Keep it in your savings (.8% interest)	Invest it at 6%
0	$1000	$1000	$1000	$1000
20	$1000	$1111	$1233	$3207
40	$1000	$1168	$1446	$10,285

The first time I learned about compound interest, the author I read wrote that it didn’t really matter how much money you invest, as long as you invest something.
I thought, “Well, this author obviously doesn’t understand that if you invest more money you get more money at the end.” I felt like I didn’t have enough money to start investing and that investments are for people who already have money and if that isn’t a horrible catch-22 I don’t know what is!

But you know what? He was right and I was completely wrong. Because what I had at 25 (ok, what I still have because I am only 28) is time. If you wait until you are 45 with a higher income to invest, you will be making 1/3 of the money you could have made if you started now. Even though I expect to make more money and to be able to invest more at 45, I will never make as much compound interest on the money invested at 45 as I would have on a lot less money at 25.

Examples like this used to piss me off, because I never had $1,000 to invest, and I still don’t have $1,000 sitting in my bank account just waiting to be invested. When I was 24 I was living in a double wide trailer in rural Alabama (true story). A big activity for me was driving an hour to go to Walmart. I barely had any income at all, but you know what I did have? Fifty bucks. I put $50 into a retirement account every month (automatically! I don’t even miss it!), and I just let it sit. And you know what? Compound interest works on $50 too! If I stick to this schedule, in 40 years I will have put in $24,000 (and hardly noticed it was missing, because I automatically moved it) and I will have $93,206. That first $600 from the first year will be worth $6,171. WHAT? Awesome.

Imagine what I could have done if I had started at 18!
(Actually, the answer to that is that I would have paid $28,200 out of pocket and I would have $144,650 by the time I retire at 65. That extra $4,200 and seven years would be worth $51,400! Learn from my missed opportunities, all you 18 year old readers!)