Tue Jun 11 2024, by Tyler Gardner

InvestingHigh-Yield SavingsFinancial EducationWealth BuildingYoung Investors

Why Women in Their 20s Should Invest Instead of Saving

If you're a woman in your 20s and you're currently putting your money into a high-yield savings account, earning, I don't know, 5%, but that money is meant for your long-term goals, I hate to say it, but you're giving up about a quarter of a million dollars by not investing that money into a low-cost index fund like Vanguard's VOO or Fidelity's FXAIX.

Here’s the Math

If you invest $250 today and subsequently $250 every month for the next 30 years at an average return of 5%, you’ll end up with about $209,000.

Now, invest that same $250 today and subsequently $250 a month for the next 30 years, but this time earning the historical average of about 10%. Now you’ll have closer to $570,000 after 30 years.

Moral of the Story

If you don't need the money now, I guarantee someone else does, and they'll be willing to pay you for the use of it.

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