Dear Mr. Katsman, I am a young student and have managed to save some money. I'd like to start investing, but my friends tell me not to bother until I manage to accumulate $40,000 to $50,000, which potentially could take years. Is there any value to my starting to invest now, or should I wait? Yedidya S. Neveh Daniel Dear Yedidya, In today's Western culture everything is about instant gratification. People tend to think for today and today only, never stopping to think about the future. Before we know it, one day we wake up and we are old. Trotsky once said, "Old age is the most unexpected of all the things that can happen to a man." We are often so busy and wrapped up in the day-to-day issues of our lives that we forget, or put off planning for the future. I'll worry about it later The most common reason I hear for people putting off saving for retirement is because they say they will get Bituach Leumi (National Insurance Institute payments), so they don't have to worry about retirement. That seems reasonable - except for one problem. Government pensions were created with the purpose of preventing elderly retirees from being thrown out into the street. There is a big difference between saving money for retirement so that you can live comfortably, travel and help your children, and not having to worry about being thrown out into the street. I'm young Another common excuse used is: "I'm young; I have my whole life to save. I'd rather buy a new car, and in a few years I'll start saving." Each year that passes with no investment will affect your retirement. Assuming you have 30 to 40 years until retirement, every year you forgo saving or investing money today will subtract one to five years from your retirement. Along the same lines, I often hear people in their 50s, when speaking about retirement planning, say: "I don't worry about retirement because I'll just keep working." Sounds good - except what happens if you aren't able to keep working? I recently met a man in his early 50s who has worked as a house painter his whole life. He told me it's getting hard for him to paint for a full day because all the hard work has taken a toll on his body. Thankfully for him, he started saving at a young age. The rich aunt Sadly, many people plan for retirement by dreaming that some long-lost wealthy relative will die and put them in their will, turning them into millionaires. Such far-fetched fantasies are common. I recently read the results of a survey that said 25 percent of Americans actually thought their plan for retirement was to win the lottery! Time to make a plan In our day-to-day lives we are always making plans. We plan what to have for dinner; we plan which parent is going to pick up which kid from school; we plan vacations. We are constantly planning. We tend to have a goal, and we initiate a plan to reach that goal. The same is true for our finances. Making a financial plan is essential to start preparing for your future. Since we can't predict the future, a solid financial plan can guide you through the uncertainties that lie ahead and help you achieve your retirement goals. Just start You don't have to be wealthy to start investing. Let's say at age 25 you invest $15,000. Then you manage to scrape together $2,000 a year to add to your account, and everything is invested at 5.5%. If you were to continue this disciplined investment approach until age 65, you would have more than $413,000. If you were to add some risk to your investment profile in the hope of getting a higher return, your retirement nest egg would grow even more substantially. If you take control of your own finances and start saving early and stop delaying, you can retire without having to worry about old age unexpectedly catching up with you. aaron@lighthousecapital.co.il Aaron Katsman, a licensed financial adviser in the United States and Israel, helps people who open investment accounts in the US.

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