Start Early The Power of Investing Bill invested $46,000 mo...

Start Early The Power of Investing

Bill invested $46,000 more than Jane, but he ended up with 19,820 less at the same 7% annual rate of return. The advantage of starting early allowed Jane to invest less, but finish with more money. The clear benefit: start early and give your investment more time to grow.

Earning a higher rate of return will build wealth faster, but to earn higher returns, you may need to invest in securities with more risk and volatility, or price change. It is important to understand the relationship between risk and return.

Investors can seek higher return potential over time for taking more risk. Lower risk investments typically return less over time.

Risk is demonstrated by volatility. Riskier investments will have larger, faster moves in price than lower risk investments. Low risk investments have a higher probability of principal protection, or less price change.

The amount of risk you are willing to take is a personal preference. See Performance and Risk to learn more.