A s a child growing up, I remember my father constantly eating Ramen Noodles in a Styrofoam cup.

It was pretty fascinating that all you had to do was add hot water, and presto, you had a ready to eat meal in a few minutes.

Perfect for an impatient kid!

As I got older I started to notice that the package of Ramen Noodles still existed in our kitchen.

My father had always struggled with money.

He had battled credit card debt and never really made good financial cents of his money.

I guess I always just thought that he really liked the cup of Ramen Noodles.

I later found it there was much more to the story.

All Too Familiar Feeling

I remember my first year as a financial advisor.  I was meeting with a couple in their early 60s.  At the time, I was 24 years old and already started a Roth IRA and was quickly learning the proper ways to invest in your 20s.  I remember this couple in particular because while many people get excited about retiring and starting a new venture in their life, with these folks, retirement was nowhere in the near future.

Combined, they had maybe $50,000 saved in their retirement investment accounts combined.  Their jobs offered no pensions, so all they had was social security.

I remember looking at this couple, and eerily, I saw similarities with my father. They had no hope of retiring.  They had done a horrible job of saving.

The Ramen Noodles Jolt

This meeting instantly made me realize that I did not want to follow in their footsteps.

I knew that I did not want to be in my early 60s and be forced to be eating cup of Ramen Noodle soup.

I didn’t want to have to worry about not ever being able to retire.  I know at the age of 24, I was thinking much more different than my peers.  None of my friends talked about retirement.  We talked about the next trips that we were going to go on, what concerts we wanted to go see, still reflecting back on the good old college days.

Investing in Your 20s Isnt Cool, Its a Must

I write this because if you are in your 20s, I know youre thinking the exact same thing.  Whats the point of investing?  Whats the point of saving?  Whats the point of even thinking about retirement?

Heres one thing I know, you don’t want to be eating Ramen Noodles for dinner for the rest of your life.  It might be good every once in a while, but I promise you, you get sick and tired of it.

So, why is it so important to start investing early in your 20s?

Most young people just don’t get it.  They think they have plenty of time to start thinking about retirement.  While, yes thats true, what most don’t understand or appreciate is that the sooner you start, the easier it is.

You dont want to discover youve waited until it is too late to retire .

For example, look at this chart.  This chart was something that was shown to me whenever I was junior in college.  The chart literally blew me away.

The chart has two young adults that should be investing in their 20s: Super Saver Parker who starts at the age of 25 and Super Slacker Sloane.   Both graduate with good paying jobs and have well enough income to start contributing to a Roth IRA.

Super Saver Parker starts putting $2,000 a year into his Roth IRA ($166.67 per month).   He does this for a total of 10 years and stops for a grand total of $20,000 he put in.  Why does he stop?   Dont ask.   Thats just part of the illustration.  

Super Slacker Sloane puts off saving because he wants to buy stuff (otherwise knows as crap you dont need).  He finally gets it and starts putting $2,000 a year starting at the age of 35.   Wanting to catch Parker, he puts in $2,000 a year for 30 years contributing $60,000 in total $40,000 more than Parker.  *Were assuming that they both average 8% return on their money. 

After they showed this chart to me in my finance class, the question that was then asked was,

Who will have more money at the age of 65?

I remember my initial thought was Duh, the guy who put in $40,000 of course! .

Hmmm..oh how wrong I was.