The power of compounding extends to taxes. Compounding helps early savers build their ultimate wealth. But taxes are always and everywhere a part of the investment decision, and they are especially critical for the young who have a long investment horizon. When a government taxes the young, it reduces the after-tax savings and those taxes hurt the most over time. Young people are inclined to ignore taxes, but they do so at a compounded cost.
In this piece on Forbes titled 15 Ways ‘30-Somethings’ Can Make Faster Progress On Building Savings, Dr. Fischer and other esteemed members of the Forbes Finance Council provide insights and guidance on building savings faster when you are young.