I looked back at the mistake I’m most prone to making: I saved the money, but only dared to invest half of it regularly.
Saving the same $10,000 each year from 1996 to 2025 (S&P 500, including dividends).
People who invested the full amount every year:
Principal: $300,000
At the end of 2005 → $137,000
At the end of 2015 → $452,000
At the end of 2025 → $2,040,000
People who invested half each year and kept half in cash:
Principal: also $300,000
At the end of 2005 → $119,000
At the end of 2015 → $326,000
At the end of 2025 → $1,170,000
That $150,000 in cash sat there for 30 years, earning zero interest.
In the end, it was worth $870,000 less.
I used to be the second kind of person, and thought I was being prudent.
Data: Slickcharts annual total returns for the S&P 500; invested at the beginning of each year. Cash earned zero interest. Taxes, fees, exchange rates, and inflation are excluded. Past performance does not guarantee future results. This is not investment advice.
Saving the same $10,000 each year from 1996 to 2025 (S&P 500, including dividends).
People who invested the full amount every year:
Principal: $300,000
At the end of 2005 → $137,000
At the end of 2015 → $452,000
At the end of 2025 → $2,040,000
People who invested half each year and kept half in cash:
Principal: also $300,000
At the end of 2005 → $119,000
At the end of 2015 → $326,000
At the end of 2025 → $1,170,000
That $150,000 in cash sat there for 30 years, earning zero interest.
In the end, it was worth $870,000 less.
I used to be the second kind of person, and thought I was being prudent.
Data: Slickcharts annual total returns for the S&P 500; invested at the beginning of each year. Cash earned zero interest. Taxes, fees, exchange rates, and inflation are excluded. Past performance does not guarantee future results. This is not investment advice.