Should you start investing now or wait until you can invest more? That is a very easy question to answer. Start investing now and then as you are able to invest more, do so. Starting early can mean a lot more money over time.

Time is money; it’s the simple truth. We spend our time working and are paid for it. It takes time for a writer to write a book that they eventually collect royalties on. A teenager spends a few hours of her time watching kids and is paid for it. You have to give up some time to make money.

Investing is even more important in time. If you invest, your money will compound over time. This means it will grow faster and faster as time goes by. If you invest now, your money will be worth much more by the time you retire than if you waited another 5 years.

If you start investing when you are young, like in your 20s, you will have the biggest advantage. You’ll have more money for retirement if you invest, and you’ll have even more if you invest it early.

Let’s say you’re 23 years old and just started a good job. You want to retire at age 65 which is in 42 years/ If you invest $500 every year for 42 years with an average return of 9%, you’ll have invested about $26,000. Guess how much this $26,000 will be worth? You’ll have about $218,000.

Now let’s say you decide you can’t invest that much right now because you are just having too much fun spending money. Instead, you wait until you are 35 to start. You will invest the same amount of money overall, $20,000, but because you waited 10 years, you invest more per year equal to about $667 a year. You can’t possibly earn that much more with an extra 10 years, right?

When you combine time and compounding, you make a powerful combination. It’s incredible how much more money you can make when you start early. Compounding will earn you more money because the money you earn each year will continue to earn money. If you want to retire comfortably, or even early, you must harness the power of time and compounding.

There is no set amount of money that you must start investing now. You could start out very small and then as you begin to earn more, start contributing more. Start by taking 2% of your income and investing it for retirement, then add a percentage point more each year to your contribution. When you hit 20%, you might find you are in a good place to retire early.