This piece is part of my 2016–2026 archive migration. Some original formatting, content, and external links may be missing, changed, or not be optimized.
The critical threshold of investing
My sister just turned 25. She has already commenced investing (earlier than myself, which was 14), but now is the time to hone in and be consistent with it, which she intends to do.
I reminded her how critical it is to fervently get started and don’t stop. 25 is the critical threshold between becoming a millionaire with little effort versus having to work your a** off to save if you earn an average income (and there is nothing wrong with this).
Recently, I wrote the article, “If You’re 25, You Can Become A Millionaire With $500/Month,” to emphasize how easy it is to become a millionaire with as little as $500. Now it would take decades to do this, so imagine what you could do if you had $1,000 – $3,000 in additional monthly income to invest.
You’ll naturally become a millionaire a lot sooner.
$500 Is A Lot Of Money To Be Investing At 25
But is it, really?
Some think, “$500 isn’t a little amount to put away in investments; that’s a lot of money to be taken from my budget.”
My question to you is, how do you normally spend your money and any additional money you have left over? Is it to pay for necessities or the unnecessary? Many people could scrape up $500 if forced to, just as many scrape up the money to pay for their rent, go on a vacation, buy some new clothes or shoes, or make their car payment. Money is always found where our priorities lie.
My question to you is: Where do your priorities lie? Do you prioritize investing and building financial independence, or do you prioritize spending, looking cool, and living above your means?
What Happens After 25?
From the graph, you will notice the x-axis maps to “age” and the y-axis maps to “growth of savings.”
Bill invested $150,000 between the ages of 35–64. His investments grew to $540,741.
Susan invested 50,000 between the ages of 25–35. Her investment grew to $602,070.
Chris invested $200,000 between the ages of 25–65, and his investment grew to 1.1 million.
Graph Source: LifehackThe moral of the story: Not only does investing at a young age bring results, but consistently investing from a young age brings you the best results. Chris invested $5,000 a year, which totals about $417 monthly. If you can’t afford to pay $417 a month, cut out the following:
Dining out
Buying coffee
Shopping
Tv subscriptions
Entertainment
Your car payment
Downsize to decrease your mortgage or rent payment
If you still can’t afford to invest this money, get a part-time job, or better yet, create a passive income source utilizing your skills – a temporary sacrifice to reach financial independence.
A Note To Parents
You have the opportunity of a lifetime to set your kids up for financial success by starting their investment journeys early. My parents helped me start investing at 14 years old; that’s phenomenal.
If I had my own kids, I would take it even further and open an account the day they’re born. It’s never too early to start investing. The sooner you start, the less effort will be required for you to reach financial independence.
Imagine investing $500/month starting from age 0. Imagine that.
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.