The following article was written by Sheean K. Patel, a member of our Gift Planning Services Committee:
For centuries, people have studied Shakespeare for his wit and his wisdom. Back in June, I started sharing some of that wisdom in a new series called:
Shakespeare on Finance
Shakespeare never actually wrote about finance, of course. But I’ve found many of his lines contain important financial lessons. This month, let’s look at one such line from one of Shakespeare’s most controversial plays, The Merchant of Venice:
“How far that little candle throws his beams!”
The Merchant of Venice, Act 5, Scene 1
Imagine a dark room containing a single burning candle. A candle is a small thing, and its flame even smaller. But it still shines brightly – and its light casts large shadows. So, in this case, the candle is a metaphor for an important truth:
Even small things can have big effects.
This is certainly true in finance. Let’s take a (very) hypothetical scenario:
John is 30 years old. He has $5,000 saved up for retirement. John decides to invest that money, achieving a 7% return every year. (Again, this is hypothetical.) Furthermore, John vows to invest an additional $100 every month, which he does for the next thirty years.
These days, one hundred dollars isn’t exactly a lot of money. But let’s look at what the result is:
By the time John turns 60, he’ll have accumulated $162,529 for his retirement.
I don’t care who you are. $162,529 isn’t chump change.
Now let’s imagine John invests $150 every month – just fifty dollars more.
By the time John turns 60, he’ll have accumulated $223,578.
How about $200 a month…for thirty-five years instead of thirty?
By the time John turns 65, he’ll have accumulated $417,741.
Now, you may be thinking, “Sure, that’s all well and good, but it’s just hypothetical.” And that’s true, it is. But the principle is what matters here. Small things can have big effects, especially over time…and especially when done consistently.
This doesn’t just have to be about investing, either. Taking that small tax deduction or applying that tiny tax credit can be a significant savings boost, over time. Taking ten minutes to check your credit score every year can make life a lot easier down the road, if you ever want to buy a new home, car, or even start a business. Creating a stronger password rather than just using “password123” can save you countless hours and money if it protects your identity from ever getting stolen. Shopping around for cheaper car insurance, looking for unclaimed money in old insurance policies, even turning off the lights…all these things add up over time.
I’ve worked with all kinds of people over my career. Some were already wealthy. Others were just getting started on their way to wealth. But for everyone, the same rule applied: little things have big effects. They add up. They make a difference.
I promise you: when you look back on your life, adding up all those small, seemingly insignificant decisions you made along the way, it’s not uncommon to think:
Look how far that little candle threw its beams.
So, as you work toward your financial goals, always remember: it’s the little things that matter!
In my next article, we’ll move away from plays and into poetry, examining a line from the first thing Shakespeare ever published.
Have a great month!
Disclaimer: National Bank Financial – Wealth Management (NBFWM) is a division of National Bank Financial Inc. (NBF), as well as a trademark owned by National Bank of Canada (NBC) that is used under license by NBF. NBF is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Investor Protection Fund (CIPF), and is a wholly-owned subsidiary of NBC, a public company listed on the Toronto Stock Exchange (TSX: NA).
Sheean K. Patel, B.Com, CIM
Associate Investment Advisor
Patel Wealth Management Group / National Bank Financial