Waiting Can Be Costly
Why Waiting Can Be Costly
Reinvesting earnings and keeping them invested to generate more earnings (compounding) helps offer a better chance of reaching your goals.
Watch this video and learn more about when to invest.
Need help? Call 888-213-4695.
Compounding makes a lifelong difference.
Accumulated earnings at age 65
The power of compounding
The sooner you get started, the more you’ll have time on your side. Enter an annual IRA contribution amount and the year you expect to retire.
Open an account and start investing now.
Or call 866-855-9102.
Source: Schwab Center for Financial Research. Assumes a consistent annual 6% rate of return with $1,200 contributions made at the beginning of each year. The amounts shown reflect investment growth only, and final results do not consider any transaction costs, fees, or taxes. This represents a hypothetical investment, is for illustrative purposes only, and is in no way to be considered indicative of any guaranteed performance an investor can expect to achieve. The actual annual rate of return and value will fluctuate with market conditions.
You could have perfect timing, but that’s usually not the case. See how a hypothetical 20-year investment, whether it was made under poor or perfect market conditions, did much better than just saving in cash investments.
- $182,665Perfect Timing
- $169,742Invest Immediately
- $148,760Bad Timing
- $66,169Stay in Cash Investments
Source: Schwab Center for Financial Research. Chart shows outcomes for four types of investors over all 20-year periods (1926–2011). "Perfect Timing”"invested each year at the market trough. "Invest Immediately" invested on the first day of each year. "Bad Timing" invested each year at the market peak. "Stay in Cash Investments" never implemented the plan and stayed in T-bills. "Perfect Timing" and "Bad Timing" invested their yearly $2,000 in T-bills while waiting to invest in stocks. Stocks are represented by the S&P 500® Index with all dividends reinvested. Indexes are unmanaged, do not incur fees or expenses, and cannot be invested in directly. Average results remained relatively unchanged when the study was extended to 12-month periods that began with a month other than January. In the case of the 12-month period that goes from February to January, "Invest Immediately" invested on the first day of February each 12-month period for 20 years.
Past performance is no indication of future results.
Already a Schwab client?
Get a Personal Portfolio Review.
- Review your goals and strategies.
- Discuss investment approaches.
- Ask questions.
Call 888-213-4695 for details.