William, starts saving $4,000 a year (about $333.33 per month) when he is 20 and stops after 20 years, after having saved $80,000/155,224.76. His brother, James, starts saving $4,000 at 40, and does so for 25 years, for a total of $100,000/231,653.79 saved. They earn 6% on their savings. At age 65, William will have $666,290 in his account, while James will have $231,000 . Despite having saved less, William's nest egg will be almost four times greater because of compounding.
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