This article was last updated on November 4
Every person dreams of finding the career that is not only financially sustainable but also rewarding personally. Many people may spend a good portion of their adult life on the quest for such a career. What many people don’t remember as they work through the years either finding or building their dream career is the second career – one that is not always thrust in the spotlight of our lives- that is equally as important. The second career that everyone must have is saving and investing for the future.
Start your second career first– Anyone past the age of 30 will likely be able to relate to the fact that is can take years and years to finally find the “perfect” job that will make you happy, keep you motivated and pay the bills. Unlike generations before us, there are few people that begin a job right out of college and stick with that job/company for their entire working lives, like many of our parents. Employees want to grow and advance and employers are simply not keeping people around for 30+ years anymore.
The important lesson here is this: do not wait until you find your perfect career to begin your second career. You should start saving as soon as you begin working. If you haven’t started saving and investing and you are in you 20’s, 30’s, 40’s or even 50’s as your read this, you must do one thing: Start Today! Not tomorrow or next week, TODAY. One of the main factors in having a successful “second career” is starting early. Ideally you would begin when you are first employed, but since you cannot turn back the hands of time you must start as soon as possible.
Why you should start early- Compound interest. Just as it can work negatively if you carry high interest debt, compound interest can turn modest investments into a sizable nest egg. The earlier you start, the larger the nest egg. The following example should prove why it’s so important to start early.
At age 18 Jane begins putting away $2,000 per year in an IRA with an annual return average of 10% until she stops at age 25. By age 65 Jane’s $16,000 investment is now worth over one million dollars! Conversely, Joe doesn’t start investing until he is 25. In order for his retirement to reach one million dollars, he will have to invest $2,000 per year for the next 40 years. Jane’s seven year head start really paid off!
While it is ideal to start socking away money as soon as you start earning it, do not let that discourage you if you are past the age of 20. Although we all know the importance of starting young, very few people care enough at that age to do so. It is important to understand that whatever your age and regardless of the amount- if you start putting money away now and do so consistently it will benefit you tremendously in the long run.