It is important to help people, particularly young people, understand how time is on their side. Most people have an intellectual understanding that starting to save when they are young is helpful. I do not think most people (even older people) understand just how much time can help.

**How is this?**

Which is better, saving $1 for every $10 during financial independence or $15 for every $10?

If you want to achieve financial independence ten years into the future, you need to save $15 each year for every $10 you want to spend each year in the future.

If you want to achieve financial independence forty years into the future, you need to save $1 each year for every $10 you want to spend each year in the future.

To retire at 65, start at 25 and contribute 1/15 of what you have to contribute if you start at 55. Interest on your contributions provides the rest of the funding for your financial independence.

**How do we get there?**

On pretty much every financial topic there are differences of opinion. To make my calculations, I chose these assumptions:

- Average earnings rate 7%
- In retirement, you can spend 5% of your nest egg each year to have it last 30 or more years

If we start with a plan to draw $100,000 from our retirement savings in addition to any pension and social security we choose to consider, we need $2,000,000 at retirement. That represents spending 5% of your retirement savings.

Next we determine how much we have to save annually to accumulate $2,000,000 at 7%. You would have to save $144,755.01 annually. That translates into $14.48 per $10 of annual income in retirement. I rounded to $15.

But what if we have 40 years to save the $2,000,000? Now you would have to save $10,018.28 annually, or $1.00 per $10.

For a second example, we might find someone seeking to draw $30,000 each year. To generate $30,000 with a 5% rule, we will need to accumulate $600,000. Over 10 years, our client would have to save $43,426.50 or $14.48 per $10. Over 40 years, the client would save $3005.48 per year or $1.00 per $10.

Is that a compelling way to talk about saving early? I would love your feedback.