Nathan Exposed » Compound interest is your friend

Compound interest is your friend

Now that I’m on my own, I wanted to roll over my 401k from work into an IRA. I’m so glad I did because I’m actually really excited about it.

Personal finance is very complicated and overwhelming. In fact, several financial specialists I’ve talked with seemed impressed that I’m 25 and already planning for retirement. But hey, that money isn’t going to save itself. Compound interest is your friend. It’s better to start with a small amount at a young age because it will add up quite a bit and I can add to it every month.

I also hear a lot about diversifying your portfolio. That phrase sounds so funny to me, because as a designer, I refer to my portfolio as a collection of my work. And it’s diverse because I have a wide variety of client types. Hence, a diversified portfolio. Har!

But seriously, I guess it’s really important so I did it. I still don’t completely understand what I’m doing, but I now have stocks and bonds and all that good stuff. I feel ultra-cool.

I also think I found a wonderful financial specialist at Edward Jones. Obviously the guy handling your money makes all the difference.

So if you haven’t started saving yet… why aren’t you? Go in for a free consultation. I think you’ll be shocked at how much you lose if you put it off.

Thu, Mar 15, 2007 @ 9:24 pm | Filed in Abundance | Permalink

5 Comments

My gosh, you are so ahead of the game for only being 25. Incredibly smart, intelligent, dedicated to the cause, and planning ahead. You’ll be glad you did. There is definitely something to be said for long-term gain versus short-term excitement.

Posted by Lewis on Thu, Mar 15, 2007 @ 10:46 pm

Hey Nate, good for you! I haven’t done anything with planing for my future till just recently. My boss lent me a copy of “The Secret” which was very eye opening. Two weeks later he gave me a copy of a book by T. Harv Eker called “Secrets of the Millionaire Mind”. Wow! I never understood why I spent everything I made and never saved ANYTHING untill I read that book. Talk about life changing. I wish I hade known all this twenty years ago. Ah well, it’s never too late!

Posted by john on Thu, Mar 15, 2007 @ 10:53 pm

I actually has started building a portfolio, but then my marriage blew up, and with it all the finances.
So I started over.
You’re getting a great start.

Posted by DEL on Fri, Mar 16, 2007 @ 2:03 am

What on earth is a 401K? Sounds painful!

Diversifying your portfolio is another way of saying don’t stick all your eggs in the one basket. Just be careful of diversifying exclusively into what the nice man is trying to sell you - chances are he’s on commission!

Posted by Tom on Fri, Mar 16, 2007 @ 7:31 am

good advice. i started a 401k and 2 savings accounts 6 years ago. glad i did but i think i might want to look into talking to a financial advisor. do you recommend edward jones?

Posted by aboutaboy on Fri, Mar 16, 2007 @ 12:22 pm