Recent stats from the ATO show that Aussies today retire with an average of $361,549 in their superannuation fund. This is enough to give you an income of around $20,000 per annum, which is around 20 per cent of the current Australian average income of $98,217. But it doesn’t have to be this way …

When you get started investing, in the early days you won’t get earth-shattering results. Momentum builds slowly at first, and accelerates over time with the power of compounding.

Consider this example.

I had a client recently that had just bought her first property and was keen to make some more moves to get ahead. She knew she should start investing, and had even opened an investment account. But because she’d stretched herself to buy a property, and with sky-high interest rates, there wasn’t a heap of money left over. She worked out she had enough to start investing around $70 a week.

But when it came time to ACTUALLY do the investing, something kept getting in the way. An unexpected bill, a tough week at work that required some retail therapy, something that was ‘needed’ for her house, the list went on …

She figured that not investing wasn’t that big of a deal, because investing $70 a week wasn’t going to turn into a huge amount in the year ahead. Based on the long-term sharemarket return of 9.8 per cent, investing $70 weekly should only grow to $3808 in her investments in 12 months time.

Her thinking was that given the numbers were fairly low, she could just play a bit of catch-up later to get things back on track. This is a common mistake, and when we started working together we showed her the real cost.

If you don’t invest today, you’re not just missing out on the amount of money you won’t have in a year’s time – the real cost is how much this money would grow in the years ahead. In this case, if you had $3808 in investments bubbling away with compounding over the next 40 years, the money would grow to a whopping $188,894.

So the true cost of not investing just $70 per week was really over $185k.