Andy Friedman spoke to us during Open Forum today. He is a financial adviser at Raymond James and a member of the Board of TGS. He talked about how starting to invest early is a good strategy for young people. He also revealed to us how to become a millionaire by the time we retire.

Mr. Friedman’s job is helping clients have enough money for a comfortable retirement. He told us that in South Carolina today, a person probably needs about $989,658 saved up to stop working. Of course, that number is for someone in today’s economy—not the economy in which our students will retire 50 years from now. Mr. Friedman explained how inflation devalues what people save (prices have risen on average 3% each year since 2006). Because of inflation, by the time current 15-year-olds are ready for retirement, they will need about $2.43 million. “That’s a lot of money,” Mr. Friedman said.

This sum is truly a ton of money, but Mr. Friedman explained that it is possible to acquire it. He told us how. Basically, young people must start early and invest regularly and consistently in the stock market. The money will grow more and more easily over the years, due to the “magic” of compound interest. He told us to think of pushing a snowball down a hill—a snowball is hard to get started but as it grows it will start to roll by itself. The money you invest gets increasing returns year over year if you leave it alone.

“Compound interest is considered the eighth wonder of the world,” Mr. Friedman said. “But time is the key.” He gave us a concrete example: if a person had put in $100 in the 1976 market and had added $100/month until 2026, they would have approximately $2.3 million, a very comfortable retirement. He supported this claim with statistics about how the market has performed since 1976—some years it has earned up to 37% returns on investments.

“Waiting will cost you more,” Mr. Friedman told us. “Start early, invest every month, use employer plans, and raise contributions.” Thank you, Mr. Friedman, for your wise advice!

By Riley, photos by Eleanor