Consistency is the Hallmark of Savings Success

Slow and Steady Often Wins a Successful Retirement Race

It’s open to discussion, but three cultural icons may have been visionaries of the “get rich slow” financial strategy: 

• Mick Jagger, barely 21 in 1964, and The Rolling Stones sang, “Time Is On My Side” 
• In 1668, “The Tortoise and the Hare” was published as one of Aesop’s Fables
• Albert Einstein is often credited with citing compound interest as either the eighth wonder of the world, or, the world’s greatest invention.

No matter the interpretation, the math confirms these lessons. Easily accessible online calculators demonstrate that $200 saved monthly for 35 years – an $84,000 investment - will yield $284,000 (330% of principal) when 6% average interest is paid quarterly. 

The key to success is learning the savings habit as early as possible and practicing it consistently, by pay period or by month. Value comes over time, say 20 – 30 or more years, with not only the dedication to save, but the due diligence to find vehicles that regularly outperform widely accepted indices. Experts suggest that investors connect with advisers who practice what they preach, and have the patience to withstand market volatility.

Three lenses with which to view savings and wealth management are:

• The short-term: an immediate five-year period of need when funds should not be put at risk, and no fees should be incurred for preservation. Banks and money market funds are ideal destinations, although they credited very little in today’s environment.

• The mid-term: from 5 – 20 years out, perhaps to include children’s education funds, where investments are proportionately aggressive and carry minimal fees.

• The long-term: 25 – 35 years out, when there’s time to recover from setbacks, and an investment mix consistent with risk tolerance is implemented. The latter years, in one’s 50s or near 60, is the time to consider staging the accumulation for preservation or distribution. 

While the media are fraught with noise about “getting rich quick,” many investors have found success around the sage advice and discipline of “getting rich slow.”