I've saved more than $300,000 by age 30, and the smart choice I made at 16 played a huge part

teenager boy hoodiePhovoir/Shutterstock.comThe author is not pictured.Phovoir/Shutterstock.com

  • Over the last 13 years, I've watched my investment accounts grow from $500 to over $300,000.
  • Opening an investment account as a teenager was the smartest thing I've ever done with my money.
  • Even if you're not a teenager, investing your money as soon as possible will help motivate you to continue building wealth.
  • Read more personal finance coverage.

At age 16, I hung up my hard hat after another brutal week of digging ditches in the scorching Texas summer. Then, I did something that would change the course of my life forever.

I opened an investment account.

That sentence leaves out some embarrassing details. In reality, I cashed my paycheck, scrambled together any spare change I could find, and marched myself into the bank, slightly terrified. My anxiety didn't get any better when I heard the sound of my pockets jingling from the loose change - my life's savings at the time.

The sum total of that change? $500.

Fast forward 13 years later. That $500 has grown to over $300,000. (Actually, $312,918 as of my most recent net worth update, which I publish each month on my blog.)

Granted, that initial sum got some help along the way. (We'll get to those details in a minute...)

But the most fascinating part about this whole journey?

My $300,000 today all stems back to that decision I made, so many years ago, to do something with my money.

How I grew $500 to $300,000

We'll get the technical details out of the way first.

At first, I was terrified of the stock market, so I kept that $500 invested in "cash." Specifically, I'd invested in a Certificate of Deposit, which was earning an impressive 5% at the time.

I remember vividly the intoxicating feeling of seeing my first investment returns. At the time, those returns were nothing more than $25 a year, but that didn't stop me from immediately doing the math. 

Digging ditches, I was earning less than $10 an hour. And yet, just because I'd chosen to invest my money, I was given a free $25.

I couldn't believe it!

If $500 could take the place of me digging ditches for two and a half hours, imagine what $1,000, $10,000, or even ... $1 million could do.

This is why I say opening that investment account was the smartest decision I ever made.

As the old cliche goes, teenagers have to get a job so they can "learn the value of a dollar." And yet, with that $25 of interest, I'd learned far more about the true value of a dollar than I ever did battling heatstroke as a Texas ditch-digger.

So, I made it my mission to invest as much money as possible.

Eventually, I worked up the courage to invest in the stock market. There, I earned even more than 5%, although I had to weather the terrifying storm of the 2008 Great Recession to do so.

Through college, I kept investing any spare cash I earned. By the time I graduated at age 23, those small contributions - nothing more than beer money here, part-time job money there, had turned into $25,000.

After graduating college, I was offered an entry-level job in finance, making around $50,000 a year.

It was more money than I'd ever seen, but I fought the temptation to live large on my newfound salary. Instead, I remembered  my mission to invest as much money as possible.

I kept living frugally, and soon used my excess earnings to build something resembling a three-fund portfolio of index funds.

That first investment account helped me reach $300,000 as a 29-year-old

I'll cut the story short there, because hearing about how I continued to invest a couple hundred dollars a month for years on end might get old. (If you're really curious, I've written over 150 posts about the time in my life between ages 25 and 29 on my blog.)

But rest assured, I didn't make any fantastic one-off investments, start a million-dollar business, or anything of that sort. Instead, through nothing more than steady contributions into index funds, my work's 401k, and my IRA account, that initial $500 has grown into well over $300,000.

The strategy hasn't changed, either. As a 16-year old, I lived slightly below my means and invested any leftover money I had into a CD account. As a new grad with my first "real" job, I simply kept up the tradition; I lived slightly below my means and invested any leftover money I had into my index funds.

The principles are the same, and that's because everything traces track to that incredible motivation I felt when I first saw that $25 of investment income deposited into my account.

Teenagers aren't the only ones who can take advantage of time

Look, I fully understand that the only people who can take the advice of "invest as a teenager" are well, teenagers. And the chances of them breaking away from Fortnite, Snapchat, or whatever the kids these days are into and reading an article about investing are hilariously slim.

But that's missing the larger lesson here.

For one, opening an investment account grants you the obvious advantage of time. 

One look at a compound interest calculator is enough to prove this. If you open an investment account early enough that it will have 30 years to compound, then all it takes is $1,000 invested per month to all but ensure you turn yourself into a millionaire. (Assuming reasonable 6% to 7% annual returns.)

But in my opinion, there's an even better lesson here, one that even I have to remind myself of frequently. 

Putting your money to work is more powerful than we can imagine. The sooner you put that money to work, whether it's your first investment account or just adding to an existing one, the faster you show yourself the amazing effect of seeing your passive income grow.

At a certain point, it becomes an upward spiral of wealth. You investments earn more money, which shows you the power of your investments, which motivates you to invest even more!

Before you know it, you'll be writing about seeing the growth of your account from $500 ... to $1,000 ... to $100,000 ... then $300,000 and beyond.

Sean, who goes by "The Money Wizard," is a 28-year-old blogger and financial analyst. He grew his net worth by more than $100,000 in two years and is on track for an early retirement.

Personal Finance Insider offers tools and calculators to help you make smart decisions with your money. We do not give investment advice or encourage you to buy or sell stocks or other financial products. What you decide to do with your money is up to you. If you take action based on one of the recommendations listed in the calculator, we get a small share of the revenue from our commerce partners.

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