"People get overwhelmed [when] they think about how much they’ll need one day," she said.
"The truth is that it’s not how much you save when you’re young, it’s the frequency of saving when you’re young… it’s the consistency."Torabi suggests starting small, because with compound interest any money you save will grow exponentially over time.
"If you start at 25, saving $9 a day, saved over the course of 32 years — historically that has averaged 8% annual return — you can end up with $1 million by the time you’re 67."The simple fact that you'll end up with more money than you actually put away is one way to motivate yourself to save.
Torabi offers another example to undermine the importance of starting to save while you're young.
"If you’re 25 and you start saving $10 a day today for the next 10 years, and then stop, and just let that money continue growing in those investments [until retirement], you’ll have more money than someone who started at 35 and saved until retirement."When it comes to actually putting the money away, Torabi's best advice is to automate your savings: "Just set it and forget it."
The important thing to remember is that the earlier you start — even if you're consistently putting away less than $10 a day — the more money you'll end up with.
- via Business Insider