The account that beat the bigger paycheck 📈

Welcome to Inner Equity - my weekly newsletter about building financial confidence on the path to the life you want 🏡

Each week, we break down one meaningful money concept and leave you with an exercise that you can use to put it into practice.

This week, we’re looking at why a small contribution that never stops beats a big one that starts late 👇️

If you earn well and still feel behind on retirement, you may have a plan to catch up. 

Bigger contributions, starting soon, once things settle down a little (you know the plan, I’ve had it too).

It’s worth noting that that plan loses to a smaller one that never stops. Greg is the reason I believe that.

At 25 he set a goal to be a millionaire by 50, and he started with $50 a month (that was all he had).

The part of his story that stuck with me was the comparison inside his own house.

His wife worked at Costco for 20 years and put a modest amount into her 401(k) every paycheck (nothing anyone would brag about). 

He contributed far more, but for only 10 years.

Through the same years and the same market, her balance came out 10 to 15% bigger than his (by his own count).

Let’s look at the math (his exact numbers aren’t mine to share, so here’s a clean version). 

That’s $70,000 less, and the only thing that changed was how long the account had been running.

You can always find more money later. You can’t find more months.

There’s a triangle Greg used to explain it. When you’re young you have time and no money. In your working years you have money and no time. In retirement you have both, and your health starts making the decisions.

Most of you are in the middle of that triangle, which is exactly when the catch-up plan feels smartest (and when it quietly costs the most).

So forget the bigger number next year. 

This week, find the contribution you’ll never have to pause. Set aside 20 minutes and work through these three steps:

1. Write down your catch-up plan. The amount you keep meaning to start contributing, and the date you keep moving.

2. Cut it in half. Ask whether that smaller number could keep going for 20 years without you touching it, through a job change, a new baby, or a bad year (all three happen). If not, cut it again.

3. Automate it this week. Tie it to payday so it runs without a decision. You can raise it later.

Do that third step and you’ve already done the thing Greg’s wife did (with 20 years of paydays ahead of you to raise it).