Avoiding index funds for five years in early adulthood will cost Humphrey Yang over C$1 million in projected retirement wealth.
Yang, a former financial advisor, avoided investing from ages 21 to 26 because he believed wealth was only possible through starting a business or joining a pre-IPO company. He also attributed this avoidance to a scarcity mindset inherited from his father.
If Yang had invested $500 a month during that five-year window, he would have contributed $31,000 in total. Left to compound at an 8% average annual return in an S&P 500 index fund, that principal would be worth between $750,000 and $1 million by the time he reaches age 65.
The cost of the decision was US$750,000 or more, which exceeds C$1 million at current exchange rates.
emergency fund
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