A Job You Enjoy Is More Important Than Being Good at Saving

enjoy job

If you have to choose between being a super saver and having a job you enjoy, hands down I would choose the job I like.

Creating a comfortable retirement income is all about:
how long you are in the work force
how quickly you can reduce or eliminate your debts and fixed costs (mortgage, child raising)
and finally, saving the relatively small amount of 6-10% of your gross income

If you find a job you enjoy, chances are you will be good at it and will continue to upgrade yourself to stay valuable to your employer and clients.

The longer you are a productive working citizen:

  • the greater the amount of money you can spend on things and experiences while raising the children
  • the more financial mistakes you can make and still recover before it’s time to retire
  • the more you will contribute to your Canada Pension Plan or work pension plan
  • the less time you will have to go shopping and buy things you probably don’t need

And the number 1 reason working longer is good for your retirement is:

  • The longer you work, the longer the miracle of compounding interest works for your retirement savings.


If you are reader of financial blogs, you have probably heard this over and over, but it’s worth reinforcing one more time with the story of William and James.

Twin brothers, William and James are now 65 years old.

Forty-five years ago, when William was 20, he started a retirement account, putting $4,000 in the stock market at the beginning of each year. After 20 years of contributions, totaling $80,000, he stopped making new investments but left the accumulated contributions in his account. The fund earned 10 percent per year, tax free.

James, started his own retirement account at age 40 (just after William quit) and continued depositing $4,000 per year for the next 25 years for a total investment of $100,000. James investments also earned 10% tax free. When both brothers reached the age of 65, which one do you think had the bigger nest egg?

The answer is startling:

William’ s account was worth almost $2.5 million.
James’ account was worth less than $400,000.

Despite having invested less money than James, William’s stake was over $2 million greater. The moral is clear; you can accumulate much more money by starting earlier and taking greater advantage of the miracle of compounding.

Leave a Reply

Your email address will not be published.