There can be a six-figure cost of waiting to invest, with even small regular habits making a big difference. (Source: Ben Nash\/Getty) <\/p>\n
The smallest money habit<\/a> you skip is often the one that costs you the most. $10 a day feels like something that won\u2019t make a difference – but it\u2019s not.<\/p>\n If you skip that habit, you don\u2019t just miss out on a few thousand dollars this year, you give up decades of compounding<\/a> that could have delivered you an extra six figures by the time you retire. Opportunity cost<\/a> is real, and expensive – but it can be avoided with the right approach.<\/p>\n We recently helped a client that was doing almost all the right things. She had a good income<\/a>, had bought her first home a couple of years earlier, and had an investment account set up. Her savings capacity was a little tight after the property purchase and a few interest rate rises<\/a>, but she did have room to invest $10 a day.<\/p>\n RELATED<\/strong><\/p>\n But the problem was that she never turned the automatic investment on. Her justification was simple – if she missed this year, the most she would lose was a few thousand dollars – and she could just catch up later.<\/p>\n But the numbers told a different story. $10 daily adds to $3,650 over the course of 12 months. Based on the long term Australian share market return of 9.8<\/a> per cent, that one year of contributions for a 30-year-old today would grow to $100,806 by age 65.<\/p>\n Waiting is expensive.<\/p>\n Compounding<\/a> is a multiplier that can work for you or against you. The earlier you get money invested, the more time that money has to grow. If you delay investing by a year, you don\u2019t just miss one year\u2019s return – you miss the compounding you would have received every year on the amount you didn\u2019t invest.<\/p>\n This is why \u2018I\u2019ll catch up later\u2019 doesn\u2019t work. Later, you might even contribute more, but those dollars get fewer years for compounding. Even if you fully match the amount you didn\u2019t invest, the head start you could have benefited from is gone.<\/p>\n Small numbers can make a meaningful difference when they run on a schedule. $10 daily is $70 weekly, which can be captured by switching one dinner out<\/a> to a meal at home, or one Uber ride you swap for public transport. You can set up an automatic transfer to a low-cost investment fund or micro-investing app<\/a> so it happens without you having to think about it.<\/p>\n By the end of year one, you would have contributed $3,650 and received a few bucks in growth and dividends on top. That\u2019s not life-changing by itself, but the impact comes from leaving it alone for decades. Those early dollars keep putting in the work while you sleep.<\/p>\n Story Continues <\/p>\n Motivation can be unreliable, but systems aren\u2019t. Treat your investing like a bill you pay for yourself, and if you set up your investing to happen on payday, the money moves before you can spend it. Pair your investing with a structured banking set up that supports your new habit – bills come from one account, pocket money is topped up weekly, and savings and investments sit out of sight.<\/p>\n And if $10 a day really feels tight, start lower and push this up each quarter or when you receive a pay bump. The habit is the win here; the amount can grow as your income grows over time.<\/p>\n Focusing only on what\u2019s happening this week or month will talk you out of good decisions. Zooming out to look at the long term will make the impact clearer. A small change today can give you a six-figure result later – and that\u2019s true whether your goal is financial independence, buying an investment property<\/a>, or simply more flexibility in your lifestyle.<\/p>\n Use a simple compound interest calculator<\/a> to project how small regular contributions can grow. When you see how your money will compound and grow over time, it gets easier to lock down your investing, even when life gets busy.<\/p>\n Life is busy, and you\u2019ve probably got enough things on your to-do list, so you want to eliminate friction wherever possible. When it comes to investing, you can remove friction by pre-selecting your investment option and setting up your regular investment to happen automatically. The win here is investing throughout market cycles, not timing it perfectly.<\/p>\n And as you move forward, it\u2019s critical you celebrate your progress. People quit when they only look at the gap between where they are today and the end goal. But instead, you should focus on your progress and wins along the way. Each month you hit your investing target is a win. And these small wins compound into big results over time.<\/p>\n The smallest habit you skip is the one that can cost you the most. $10 a day won\u2019t break the bank, but a year without this will cost you six figures in the future.<\/p>\n Start small with a number you can stick to, automate it, protect the habit with an automated banking system, and celebrate your progress as you get compounding working for you instead of against you.<\/p>\n Ben Nash is a finance expert commentator, podcaster, financial adviser and founder of Pivot Wealth<\/a>. Ben\u2019s new book, Virgin Millionaire; the step-by-step guide to your first million and beyond is out now on Amazon<\/a> | Audiobook<\/a>.<\/p>\n If you want some help with your money and investing, Ben has created a free seven-day challenge<\/a> you can use to get more out of your money you can join here<\/a>.<\/p>\n Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstances before acting on it, and where appropriate, seek professional advice from a finance professional.<\/p>\n Get the latest Yahoo Finance news – follow us on <\/strong>Facebook<\/strong><\/a>, <\/strong>LinkedIn<\/strong><\/a> and <\/strong>Instagram<\/strong><\/a>.<\/strong><\/p>\n You could find $10 a day by switching takeaway for a meal at home, or an Uber ride for public transport, and it could make a big difference over time. (Source: Getty) <\/p>\n