1 – 31 AUGUST 2023

Maximise your money in your 20s: 1 – 5 August

Day 1: Harness the power of time – START SAVING EARLY

Time is your greatest ally when it comes to building wealth. Start saving as early as possible, even if it’s a small amount. By making regular contributions to a savings account or investment fund, you can take advantage of compounding interest and returns over time. The earlier you start, the more time your money has to grow, giving you a significant advantage in achieving your financial goals.

Challenge your savings habits with these useful tips from our professional financial advisers:

How to grow your money without even noticing it

Our advisers unanimously recommend START SAVING EARLY! It’s the best thing you can do, due to the effects of compounding interest where your savings starts earning for you over time. While it can feel like you don’t have enough dollars to stretch from week to week, start small by putting away $5 a week, every week into a savings account. As soon as you get a pay rise, put a portion of that away. When you get a bonus, put away a portion of that, and over time, it will grow and grow and grow and you won’t even notice it!

Start saving a percentage of your income instead of a set amount and watch it grow

As your income increases over time, if you only save the same set amount, you just increase your spending, whereas if you increase what you save in line with what you’re earning, your savings increase as well.

Set up a managed fund and maximise on the compounding returns

Don’t miss out on the opportunity to invest in your future. Explore investment options for your savings such as stocks or managed funds to grow your wealth over time. Start with small amounts and gradually increase your investments as your income allows. Making small regular contributions into a managed fund can have a big impact later because of compounding returns.

What are compounding interest and returns?
Compound interest is when you earn interest on both the money you’ve saved and the interest it earns.  For example, when you save money in a bank, it earns interest, which is what you are paid by the bank for holding your money. By leaving the interest in your account, that also earns interest. While the compound interest starts off small, it grows bigger and bigger over time, like money growing on trees!

Compounding works for all types of investment returns, not just interest on savings in the bank, so you can have compounding returns on your managed funds. The longer you have to invest, the more earning potential it has. 

The secret to earning compounding interest and returns is time
Let’s say you invested $1000 returning 10% annual interest, over 30 years just that $1000 alone with compounding returns would earn approximately $17,449.00. Impressive! So, the earlier you start saving or investing, the longer you’ll have to earn compounding interest or returns.  

If you invested $2000 each year into an investment fund earning an average 5.5% annual return from age 18 to 41 and left it in an investment fund to continue earning on the returns alone, you’d see your money grow seven times to $362, 562 at age 65*.

If you instead started investing at 42, you’d still have invested $48,000 over 23 years, but you would end up only doubling your money to $100,305 by age 65*!

The longer you have to invest, the more you can maximise its earning power. There are many options out there to earn compounding interest and returns, including auto-investing and apps like Sharesies which is a great way to invest your spare change.

You can also use compound returns to stay ahead of inflation so that your savings hold their value over the long-term, just as long as the rate of return is higher than inflation itself. Watch this video on how compounding interest works.

Wondering how much your savings will be worth? Try the Savings calculator on and see the difference compound interest can make to your end amount. 

Speak to a professional financial adviser about which option aligns with your goals and risk tolerance. Investing wisely now can unlock a world of opportunities and financial security down the road. 

*Source: – Learn more about compounding interest

Top tips contributed by:

Christine Hay | Financial Adviser
Ph 0275 730 152


Sue Richards | Investment Adviser
Ph 027 339 1167

Vanessa Belton | Financial Adviser
Ph 027 222 4449

Melanie Robertson | Financial Adviser
Ph 021 429 854

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