‘Time is money’ – Benjamin Franklin

The first time factor is the need to begin your contributions as early as possible, as every year of contributions at the beginning of your plan will, because of the power of compounding, have a greater impact on the ultimate financial result than subsequent contributions (of an equal amount).

Turning to the second time factor. When I began my career in the financial world, in the 1960s, stock & share portfolio management was largely based upon the concept of ‘timing’ – buying and selling at just the right moment. Unfortunately, this led to high portfolio activity which was often misjudged, expensive and counterproductive. Given that timing is one of the most difficult investment elements to get consistently right I soon came to the conclusion that investment ‘time’ not timing is the more important factor. By this I mean, that provided you buy sound investments, you should continue to hold them for as long as their fundamentals remain attractive. Long term investment in the stock market invariably results in more positive results than attempting to second guess short-term movements. The power of accumulating compounded capital and dividend returns should never be underestimated!

Finally, time also encompasses your life duration and how you wish to spend the retirement element of that time. Whatever your ambitions do not underestimate the possible length of your retirement. When speaking with potential retirees I was often surprised by their pessimistic assessment of the number of years they expected to live. Given good health, and modern medical care, you might well be in retirement for the long-haul. I am now 80, have been retired for 24 years, and I am looking forward to the next 20 years – it pays to be optimistic and to build your plans accordingly.