Time and money

Financial advisors often speak of the miracle of compound interest and use an example to illustrate the point, to encourage young people to save early. The first person, starting at age 25, saves $1,000 per year at 5% interest for ten years at which time he has $12,577 and then he lets that accumulate at 5% for the next 20 years and has $33,066. The second person saves $1,000 per year for 20 years starting at age 35 and in 20 years has $33,370. The second person set aside $20,000 and had only $300 more than the first person who set aside $10,000. The moral is to start early.