My name is Susanth Sudharan, and I am currently working as Senior Electrical Engineer with AtkinsRealis in Qatar. Over these years, I have gained invaluable insights, not just in my profession but also in life. One of the most significant lessons I’ve learned is the importance of saving early. If I could give one piece of advice to my 25-year-old self, it would be this: Start saving from your very first salary and remain consistent.
I, unfortunately, started saving only in the 9th year of my career, and looking back, I can see how much I missed out on. Let me illustrate this with numbers to show the stark difference that starting early can make to your financial future.
The Power of Compounding: Early vs. Delayed Start
Let’s assume an initial monthly savings amount of QAR 1,000 with an annual return of 8%, compounded annually. To simplify, let’s project the results over 20 years:
Scenario 1: Starting from the First Salary
If I had started saving QAR 1,000 per month right from my first year, by the end of 20 years, here’s how much I would have accumulated:
1. Annual Savings: QAR 12,000
2. Total Savings in 20 Years: QAR 240,000
3. With 8% Annual Returns:
After 20 years: QAR 591,525
Scenario 2: Starting from the 9th Year
Since I began saving in the 9th year of my career, I only had 12 years of investment:
- Annual Savings: QAR 12,000
- Total Savings in 12 Years: QAR 144,000
- With 8% Annual Returns:
After 12 years: QAR 233,052
The Difference
By starting from the first year, I could have accumulated QAR 591,525 compared to QAR 233,052. That’s a difference of QAR 358,473 — more than double the wealth simply by starting early and benefiting from compounding over a longer period.
Why Start Early?
1. Compounding Works Wonders: The earlier you invest, the longer your money has to grow. Compounding accelerates growth over time, so each year you delay costs you more than it seems.
2. Developing Discipline: Saving early instills financial discipline and helps you prioritize wealth creation over impulsive spending.
3. Reduced Stress: When you have financial security, you feel more in control of your future.
Practical Steps for Young Professionals
Set a Budget: Dedicate at least 20% of your income to savings and investments from your first paycheck.
Automate Savings: Set up automatic transfers to a savings account or investment fund.
Invest Wisely: Explore diversified options like mutual funds, retirement accounts, or stocks.
Be Consistent: Even during tough financial periods, try to keep your savings consistent.
Starting early is not just about accumulating wealth; it’s about building a mindset of financial responsibility and creating a safety net for your future. My own experience serves as a reminder that time is the most valuable asset when it comes to saving and investing.
If you’re a young professional reading this, take my advice to heart: Start saving now. Your future self will thank you for the foresight and discipline you showed today. Remember, it’s never too late to start, but the earlier you begin, the greater the rewards will be.