Members of Gen Y (young adults between 20 something and the mid-thirties) appear to fall into two categories. Some have called them “utilitarians” and “Pataguccis.” The utilitarians put money away for their future. Pataguccis say their top reason for saving is for vacation and travel.
It’s unfortunate because the greatest asset young people have is time. If someone at age 20 can find a way to put $10,000 aside and allow it to grow 6% annually, without adding another dollar, they will see that single investment grow to over $2 million by age 65. Wait until age 35 to put $10,000 away, and at 6% per year that money will grow to about $1.1 million; not bad but almost a million dollars less. Waiting to age 45 and that $10,000 grows to a little over half-million dollars. The only difference between these three outcomes is time. Twenty years of vacations and lattes can cost millions.
Time is one of the most precious assets anyone has in life. It’s a shame to waste it.