Time Value of Money is a principle that we need to understand to make good decision.Below is one I like to emphasize as it has practical applications to all of us at some point!Procrastination is a retirement killer!You may have already heard this one but you can do the math to corroborate.

Twins A and B turn 25 years old and have an opportunity to invest in a portfolio that earns 10% annually.

Twin A decides to save and invest $2,000 a year for the next 10 years and then stops adding but does not take any of the money out but lets it continue to earn growth until she turns 65.So she puts in a total of $20,000 ($2,000 a year for 10 years).

Twin B decides to party and take vacations and thus saves $0 until she turns 35, when she decides to save and invest $2,000 a year for the next 30 years when she turns 65.So she puts in a total of $60,000 ($2,000 a year for 30 years).

Perform the calculation to determine who has money for retirement?

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