How much time to invest?

How much time do you have to invest?

That's a very important question for two reasons.

First, because the more time you have, the more you can and should let your earnings compound -- which will give you more money in the long run.

Secondly, because you may have either a lot more or a lot less time than you think, and how you perceive time is more important than actual time.

Here's what I mean -- Based on the first rule, it's obvious that young people should be investing as much money as they can. They have the most actual time to invest.

But most young people don't reach that conclusion. They perceive that because they have a long time before retirement, they can wait to save. I've tried to point out to young people in their 20s what I wish I'd known -- and they just argue with me about how they don't have enough money to save. But they have enough money to buy beer. That immediate sensation is more important to them the long term benefit of investing now.

I know that when they're my age, they're going to look back and be sorry, but they don't perceive that now.

Also, most older people have more time than they usually think. Life expectancies are increasing, and so about 1% of people aged 65 will live to 100. That's 35 years they have. True, 99% will not reach that, but how many know whether they'll be in the 1%. What if they spend all their money before they die?

Also, as medical science advances, life expectancies will continue to increase. Thirty-five years from now, living to 100 may not be exceptional at all. The longer you live, the longer you probably will live.

So most older people think they have less time than they actually do.

Of course, unfortunately, some of us will die a lot younger than we expect or plan for. But that can't be known or predicted, so we should plan for a long life.

This is all important when deciding what to invest in, because all investments are a trade-off between more money now and more money in the future.

investing lengths
investing lengths