Dollars and Sense | The EveryGirl’s Guide to Investing

I enjoy spending time with my brother more than with most people for the following reasons:

  1. When someone has known you for your entire life, you never have to be anything other than who you are.
  2. He is incredibly easy to get along with, most of the time.
  3. He knows more about investing and financial matters than anyone I know.

David was the one who got me started investing. He picked out a fund in which he thought I should invest and fronted me the capital for the initial buy in (which I am paying back, haters). The last time he was in Afghanistan, he sent me a long email detailing the plan, the repayment schedule, and giving me all kinds of data to support his recommendation.

My thoughts were in this exact order:

  1. Ooo! An email from David!
  2. Whoa, that’s a lot of words.
  3. If he thinks I’m gonna let him give me…no, wait…repayment, cool.
  4. Well, if he thinks it’s a good idea and is willing to front his own money to do it…

Each month, an automatic transfer takes $50 out of my checking account and deposits it into a Mutual Fund. It is a medium risk fund and even during the Great Recession of 2008 when a lot of people lost a lot of money, it continued to grow, though slowly for a bit. It has since picked up steam.

This is literally everything I know about the fund. I wish I was kidding.

I’m an intelligent person and I love spreadsheets, but when it comes to investments and planning for my future, I get the same look on my face that my beloved Labrador Retriever, Littleman, used to get when I’d speak to him in French.

DSCN0523 (500x375)

miss this sweet boy.

Why yes, Simone, I hear you and I’m sure you’re right, though I have no earthly clue what you’re saying, as I am a dog.

Here’s what I do know: starting early is key. Remembering that I know almost nothing about investing, let’s run a few numbers, shall we?

If you invest $50 per month ($600 per year) in a fund making 8% compounded annually, starting at age 25, you’ll have $111,661.29 at age 60. If you wait ten years, and start that fund at age 35, you’ll end up with $51,810.46. Less than half. LESS THAN HALF. See?

These numbers imply that your 25-year-old salary is the best you’re ever going to do, ignores the initial deposit, and assumes that you’ll never be able to contribute more than $50, which isn’t likely. At least, I hope not. So my recommendation is this: start now. Contribute whatever you can, but make it a priority. Find someone knowledgeable and seek their council. And for goodness sake, don’t ask me for advice.

I have David for that.

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