Their names are Mr. Invest Now, Mr. Catch Up and Mr. Wait Longer.
On their 30th birthday, they went drinking in a bar.
Towards the end of the night, Mr. Invest Now said, “I want to start investing now. I’ll invest P20,000 every year until our 40th birthday. Do you want to join me?”
“Not now, I’ll invest and catch up with you later,” said Mr. Catch Up.
“Not now, I’ll wait a little longer, and invest when my salary’s higher,” said Mr. Wait Longer.
On their 34th birthday, the three friends met again at the same bar.
“I’m ready to invest,” announced Mr. Catch Up. “I’ll invest P20,000 every year but I won’t stop on our 40th birthday. I’ll invest until we’re 60!”
“Great to hear that! How about you?” Mr. Invest Now asked Mr. Wait Longer.
“Now now, I’ll wait a little longer, when I have more money,” answered Mr. Wait Longer.
On their 40th birthday, the three friends were in their favorite bar once more.
“This is my final year of investing! I’ll no longer invest starting next year,” announced Mr. Invest Now.
“I’m not stopping,” said Mr. Catch Up. “I’ll continue investing until we’re 60 years old.”
“Finally, I will start investing!” said Mr. Wait Longer. “And I will invest P50,000 every year until we’re 50 years old.”
On their 61st birthday, the three friends decided that they will go to Munich to attend the Octoberfest.
They took out their investments, which they all placed in the same mutual fund.
If the compounded annual growth rate of the investment is 10%, who do you think made the most money?
The tables below will show the answer.
Mr. Invest Now
Mr. Catch Up
Mr. Wait Longer
The Clear Winner
Time to answer a question…
Are you going to invest now, catch up later, or choose to wait longer?