If you have children or grandchildren in their twenties, this might be worth sending to them. Right now, they have an enormous financial advantage that they will never have again: time.
The idea is simple. From the age of 25, invest $1,000 a month into a diversified portfolio of shares and continue doing it until you are 65. Don't try to pick the next great company or predict when markets will rise and fall. Just invest every month and give your money 40 years to compound. It may sound boring, but it is extremely effective.
To put some reasonable numbers around it, Australian shares have returned around 9% a year over the 30 years to June 2026, including reinvested dividends. US shares have done even better. Past returns are no guarantee of future returns, but let's use 9% as our long-term assumption and allow for inflation of 2.5%.
It is important to talk about the result in today's dollars. Telling a 25-year-old they could have $5 million or $6 million in 40 years sounds impressive, but it doesn't tell them what that money will actually buy. So in this example, we assume the $1,000 monthly investment also increases with inflation over time, meaning they are always investing the equivalent of $1,000 today.
Do that for 40 years and the result is around $2 million in today's money.
That is a significant outcome. They will have personally contributed the equivalent of $480,000. Compounding does the rest. This is before considering their superannuation, their home, any additional savings as their income increases, an inheritance, or anything else they accumulate during their life.
Of course, $1,000 a month might be difficult at 25. If it is, start with $300 or $500 and work towards it as your income grows. What matters most is starting, because the one thing you cannot make up later is time. Someone starting at 25 has 40 years of compounding ahead of them. Wait until 35 and a quarter of those years have disappeared.
Financial independence doesn't necessarily require earning an extraordinary income or finding an extraordinary investment. Sometimes it comes from doing something quite ordinary for an extraordinarily long time.
For parents and grandparents, I think this is one of the most valuable financial lessons we can pass on. For anyone lucky enough to be reading this in their twenties, don't underestimate what you have.
You have time.
Invest $1,000 a month, give it 40 years, and create financial freedom for the future.
General Advice Disclaimer: This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different, and you should seek advice from an investment adviser who can consider if the strategies and products are right for you. Historical performance is often not a reliable indicator of future performance. You should not rely solely on historical performance to make investment decisions.