Does 5 Years Really Matter?

There’s a Chinese proverb I really like:

The best time to plant a tree was 20 years ago.

The second best time is now.

It’s a gentle reminder that timing matters — but so does beginning.

Let’s make this a little more concrete.

Two friends, one small difference

Imagine you and a friend both invest:

• $500 per month

• In a simple diversified portfolio

• Earning an average 7% annual return

• Until age 65

The only difference is when you start.

• You start at 25

• Your friend starts at 30

That’s it. Same contribution. Same return. Same finish line.

Here’s what happens.

What the numbers look like at 65

Assuming a 7% average annual return:

Person	Start Age	Years Invested	Total Contributed	Value at 65
You	25	40 years	$240,000	~$1,200,000
Friend	30	35 years	$210,000	~$830,000

(Rounded for simplicity.)

What’s actually happening here?

You contributed $30,000 more over those five extra years.

But the ending difference isn’t $30,000.

It’s roughly $370,000.

That gap isn’t from saving more aggressively. It’s from giving the money more time to compound.

Those early contributions had five extra years to grow.And then the growth had time to grow too.

Compounding doesn’t feel dramatic year to year. But over decades, it builds quietly.

What this means

This isn’t about saying everyone should have started at 25.

Most people don’t. Life is busy. Money is tight. No one explains this stuff clearly.

The point isn’t regret.

It’s perspective.

If you’re 30, the best time wasn’t five years ago anymore. It’s now.

Because five years from today, you don’t want to be comparing “35 vs 40.”

Time is one of the few financial levers that works automatically once you begin.

Plant the tree. Let it grow.