One Year of Waiting Costs $112,820

One year of waiting costs $112,820. That is the gap between starting a $500 monthly investment today and starting it twelve months from now, and the extra money you would actually put in is only $6,000.

The setup

Take a soldier who invests $500 a month in an S&P 500 index fund, which inside the TSP is the C Fund. That is $6,000 a year. Assume 10% a year, which is roughly the long-run nominal average of the S&P 500 since 1926. It is an average, not a promise. Some years it drops 34% in 33 days like it did in March 2020, and some years it climbs 25%. I use 10% because it keeps the math simple and close to the long-run record.

Now run it for 30 years with monthly compounding. You put in $180,000 of your own money in total. The account ends at about $1,130,244.

What the delay does

Same soldier, same $500, same 10%, but they wait one year to start. That is 29 years of contributions instead of 30. They put in $174,000 of their own money, which is $6,000 less. The account ends at about $1,017,424.

Subtract the two and you get $112,820. A $6,000 difference in contributions turned into a $112,820 difference in the final balance. The reason is that the first dollars you invest have the longest runway. The first year of contributions is $6,000, but at 10% for 30 years it is the money that does the most compounding work, and it is the money that goes missing when you wait.

Waiting five years is worse

If the same soldier waits five years and invests for 25, the balance lands near $663,000 instead of $1,130,000. You skipped $30,000 of contributions and lost about $467,000 of ending wealth. Waiting for the right moment, a promotion, a PCS to a better duty station, or a calmer market feels reasonable in the moment. The math treats every one of those delays as a tax on your future self.

Where I learned this the hard way

I came to this country in 2008 at age 20 with nothing. I worked three jobs. At 30 I came back from Hawaii with $20 to my name. Reading The Intelligent Investor changed the way I thought about time and price, and I started putting 50 to 60 percent of my income into S&P 500 index funds, the TSP C Fund and VOO or VFIAX. I have never sold, including through 2018, 2020 and 2022. That is how I got to roughly $750,000 in eight years and $781,000 today. The part I wish I could change is the years before I started. Those are the years that would have compounded the longest, and I cannot buy them back.

What this means on a soldier's pay

You do not need $500 a month on day one. The point of the math is that a smaller amount started now beats a bigger amount started later more often than people expect. If $500 feels impossible, start with $100 a month and raise it every time you get a pay raise or a promotion. The habit and the start date matter more than the first amount.

The steps I follow are laid out in the Military Wealth Path. The short version is that I automate the contribution, hold one broad index fund, and refuse to check it every day.

One honest caveat

These numbers are a model, not a forecast. Returns are not smooth. You could see a 10% average over 30 years and still sit through multiple years in the red. Fees, taxes and the type of account change the final figure, and the real world will not give you exactly 10% in any year. What the model shows with certainty is the direction: starting earlier beats starting later, and the gap is large.

Start the clock

I am a battle buddy, not a financial guru. I do not know what the market does next year, and neither does anyone else. I know that a dollar invested today has one more year to work than a dollar invested next year. Boring on purpose, relentless by design. The best day to start was a year ago, and the second best is today.