Conversation With A Coworker
Two months ago I had a conversation with a new recruit about investing. (The reason I even started investing was because my field coach at work taught me, so I try to pass it on now to more junior members)
He was young, had his whole career ahead of him, and I was explaining why your 20s are such a powerful time to start investing. Every dollar invested early has decades to compound.
His response was, "I need to make more money first."
Then about six weeks later, I found out he bought a brand-new $75,000 Toyota Tacoma on payments.
To be clear, this isn't a post about car payments. Buy what makes you happy if it fits your priorities.
It's about opportunity cost.
Most people think they need a higher income before they can invest. But somehow they're comfortable committing hundreds or even over a thousand dollars every month to a depreciating asset.
Imagine if even a portion of that payment was going into index funds instead.
The biggest advantage young people have isn't a high salary.
It's time.
The dollars you invest in your early 20s often become the most valuable dollars you'll ever invest because they have 30-40 years to compound.
You can always buy the nicer vehicle later.
You can never buy back the years of compounding you gave up.
