The final piece of advice my cross-country coach gave me before he passed was, “Start your 401k as soon as can and put in as much as you can.” It was my first year in college and it made no sense to me. He tried to explain it to me. I caught that involved working and retirement. I did my best to follow his advice and keep an eye out for it. The first and only time I have encountered the possibility of starting a 401k at work was five years ago. Their business manual mentioned they would pay into one after working there for 6 months, but I never met that requirement.
At the time, I missed the moral of his advice. Time is an important aspect of life and younger people need to catch as much of it while it’s abundant. Time becomes rarer as we age and that’s why older people value it so much. Time is a useful tool that us younger folk need to realize we have available to us. Like how time helps timer balls catch pokémon, it also helps our finances by using rollout, leech seed, pin missile, return and stockpile.
Rollout for Retirement
Retirement accounts act like rollout, growing stronger over time, on their own, and with little effort by the trainer. To get the best growth, we have to choose the best type for us and what will let time promote its growth.
If I would have looked into other ways to invest for retirement after my visit with my coach, I would already have 12 years of retirement built up. Instead, I currently have my young, 9-month-old fund.
Nonetheless, now is not the point on my timeline I need to focus on, it's when I’m 70 years old. At this rate, I should have 40 years of retirement built up by the time I’m 70. It may not be as splendid as 52, but it’s better than 28.
A common problem I read about is the trend of people starting to invest in retirement in their late 40s/ early 50s. They feel like they finally have the money to, but they also have to invest more money to reach their goals. As this JP Morgan Funds chart shows us, Bill started later than Susan and Chris and couldn't reach the same result. That is why my coach felt it was important for me to start investing when I was younger. The more time it has to grow, the stronger it will become.
Leech Seed Interest & Dividends
Interest and dividends are the leech seeds of the financial battle scene, they give a little bit of extra money at the end of each turn. The more time, the more turns, and the more opportunities to recover more money.
Most people have experienced interest either in their savings accounts or with their credit. High-interest savings, select checking accounts, and CDs provide our money with the benefits of earning interest. Typically, interest is determined at the end of each statement cycle. I have a rent savings account where I store my rent money during the month. The end of its statement cycle is just before rent is due. Once I collect the interest, I use that money to pay rent.
Dividends are a little more uncommon in the wild. They are primarily found when owning stocks, but they act a little a little similar to interest. When we own a stock or share, we own that part of the company. Most companies have an agreement to share the profits throughout the year. These dividends are paid to the shareholders based on how many shares they own. This is real money that can be received as a deposit or a check. I have all my dividends set up to be reinvested, so it immediately purchases more shares. The longer I hold the shares, the more dividends I receive.
Pin Missile through Payments
Payments act like pin missiles; the user uses many weaker attacks collectively to do a greater amount of damage. This method pays with smaller amounts over a longer period of time, instead of paying a large lump sum. The more time available, the smaller and more affordable the amounts we need to pay.
Payments can be before and/or after receiving an item or service. I have generally encountered payment plans with doctors’ offices, small businesses and the sales of large ticket items, like cell phones. When agreeing to a payment plan, both the business and the customer determine over how long the payments will be made. This can take a $600 phone single payment and pain split it into 12 payments of $50 over one year, or 24 payments of $25 over two years. Although they are more affordable, in my experience the company usually still owns the item until it has been paid in full.
Return with Reputation
Our financial reputation is our return, the higher our friendship, the stronger our return is. The more time we have to build our reputation by being reliable and responsible, the more we can train it to be friendly. Having a good reputation has returned for me a couple of times, like when the bank forgives my occasional overdraft fee or a loan understanding a rare late payment.
Our credit scores are pretty much just a numbered short-cut for people to understand our reputation. It is primarily determined by how much time we’ve been using credit and how often we were responsible with it. 6 months of bad behavior looks worse over of a year, but over five years is not too bad. The higher the score, the higher our percentage of being responsible, and the stronger the return. The lower the score, the less responsible we likely are, and the stronger the frustration is. The last four years of on-time payments and healthy credit ratios have raised my credit score 60 points from my first year in New York.
Stockpile by Saving
Saving is like stockpiling, the more times it's used before spitting up, the stronger it grows. The more deposits we make without withdrawals, the more powerful the savings become. It’s simple math, adding and never subtracting always increases in value.
I have trouble with saving. Either I have other attacks that I want to use my money for, or I spit up sooner than expected. Usually, I don’t start saving soon enough, and my stockpile doesn’t have time to build strong enough. However, about six months before my fiancé and I moved in together I started saving for the move. I budgeted $20 a paycheck to stash away for the move. It was very successful.
Time is something that younger people don’t fear. So when it comes to using time to assist with our finances, we need to have a clear body and not let it’s scary face slow us down. We need to harness the power of the timer ball and let time give us strength.
Let’s chat: How do you use time to assist with your finances?
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