The importance of investing early - compound interest!

Consider three different investors, each investing £500 per month throughout and achieving 7% annual growth every year.

One investor, Sam, starts at age 25. The next investor, Elizabeth, at 30 and finally John, at age 35. How different could their portfolio values be at age 65?

So by starting at age 25, Sam’s portfolio is worth £600k more than John’s, even though he has only invested an extra £60k. That’s the power of compound interest and investing early.

import numpy_financial as npf
import numpy as np

monthly_inv = -500
years = 40
interest = 0.07
pv = -8000

value = np.asarray([npf.fv(interest, year, monthly*12, pv) for year in allyears])