It’s the most important moment in one’s investment career - the day they receive their first paycheque.

That is the moment that a young person can start a discipline that will last a lifetime - a discipline that will set them up for life.

The first paycheque is a key moment because it is the easiest time to do something that is really hard to do. Foregoing short-term gratification for the promise of future wealth is a hard sell to anybody, let alone someone just out of school. But it is the best time to take that step. Prior to getting a full-time job, they are not used to making real money. Their lifestyles are built around little or no cash coming in. In other words, if they carve out 10% of every paycheque and invest it, as the Wealthy Barber suggests, they won’t miss it.

I recognize that young people usually have some obligations by the time they get their first real job. The car needs repairing, student loans need to be repaid and there is plenty of stuff to buy – clothes, mountain bikes, iPods and Mexican holidays.

But in most cases, those requirements can be handled with 90% of their take home pay.

Even if you don’t agree that it is the ‘easiest’ time to develop an investment discipline (Note: I’m not saying it’s easy, just easier than any other time in the first half of a person’s life), you can’t argue with the math. Every time I look at the numbers around getting started early, I’m blown away.

Take two investors, one who is 25 years old and the other 30. Both plan to retire at 65. If they each invest $200/month until they retire, and earn a compound return of 8%, it’s obvious that the younger investor will come out ahead. But few would expect by just how much. The early starter will accumulate roughly $648,000, while the procrastinator will have just over $430,000. That’s a difference of 50%, or over $215,000. The power of compounding at work.

Pretty convincing stuff, but I doubt that many 20-year olds are reading this blog, or ones like it. I don’t know how we get the message out, but I’m willing to help where I can. If you know a twenty–something who needs a push, I’d be happy to talk to her/him. Don’t hesitate to call (1-888-888-3147) or email me (tbradley@steadyhand.com).

If we can get them to make the right decision at that ‘first paycheque moment,’ they’ll never regret it. They might even thank us one day...NOT.