Weekend reading: how to get time on your side

What caught my eye this week.

Time is something you can never have enough of when you’re compounding your way to financial freedom.

That’s because the big payoff from compound interest is back loaded.

In the early years, how much you can save from your income matters most.

But later on, your gains on money already socked away is usually what makes the biggest difference.

A return of say 10% on a near-retirement pot of £1,000,000 is an awful lot more than 10% on your first year’s savings of £5,000.

It’s £100,000 versus £500, to be precise about it.

Clearly the longer you can compound your money for, the better.

Unfortunately we can’t go back in time to begin earlier – the age-old lament of savers when compound interest first ‘clicks’ for them.

But in a novel post at On Dollars and Data, Nick Maggiulli suggests finding a few extra years further down the line as a way of boosting your returns:

How exactly?

According to the data, the answer is…exercise.

Exercising regularly to improve your strength and your cardiovascular health is the most effective way to increase how much time left you have on this Earth, all else equal.

I agree that personal fitness is an under-appreciated part of the game we’re all playing.

Few people would be happy to retire to fewer years than they might have enjoyed if they’d stayed in shape, or with not being able to do as much as they’d like due to physical limitations.

Not if they can help it, anyway. And Nick does his usual great job of marshaling the numbers to show that many of us can indeed help ourselves.

A solid exercise habit can be expected to add three to five years to your life, he finds.

Good, but even better getting fits means an additional six to eight years of your later years might be healthy – compared to if you’d done nothing.

Nick says:

You don’t need stress yourself out trying to save every penny. Instead, you exercise more, reduce your stress, and extend your life. This is a non-financial solution to a financial problem.

And while it might seem unorthodox, for those that are having trouble saving more, it might be the best option available.

Check out the full post, and then get moving!

Have a great weekend.

From Monevator

Passive vs active investing: why passive wins – Monevator

Fixing your financial posture – Monevator

From the archive-ator: how to protect your portfolio in a crisis – Monevator


Note: Some links are Google search results – in PC/desktop view you can click to read the piece without being a paid subscriber. Try privacy/incognito mode to avoid cookies. Consider subscribing if you read them a lot!1

Bank of England postpones next interest rate decision for a week – ThisIsMoney

Average energy bills to be capped by government at £2,500 from October – Sky News

Halifax and housebuilder Barratt warn of challenges ahead for property market – Guardian

How a thief is stealing thousands from London gym goers – BBC

Pioneering study reveals the best and worst jobs in the UK – Guardian

Europe’s new dirty energy: the ‘unavoidable evil’ of wartime fossil fuels [Search result]FT

Lloyds of London hands staff a £2,500 cost-of-living bonus – ThisIsMoney

Property investor accused of shutting down criticism over £10,000 courses – Guardian

The bad news for the pound is not all in the price [Search result]FT

Products and services

How the new ‘energy price guarantee’ will affect gas and electricity users – Guardian

Chip launches lottery-style savings product with £10,000 top prize – ThisIsMoney

Open a SIPP with Interactive Investor and pay no SIPP fee for six months. Terms apply – Interactive Investor

When will King Charles’ head appear on UK coins and banknotes? – ThisIsMoney

Natwest 3.8% Digital Regular Saver account review – Be Clever With Your Cash

Heat your clothes to save on energy bills – Guardian

Sainsbury’s Bank slashes credit card Nectar points – Which

Homes with kitchens worthy of The Great British Bake Off, in pictures – Guardian

Comment and opinion

The only equation that matters – Fortunes & Frictions

How passive are markets, actually? [Spoiler: more than you think. Search result]FT

Retiring from unemployment – Dror Poleg

The Great British housing wealth divide [Search result]FT

What’s alpha? – Morningstar

Some tips on successfully working from home – Humble Dollar

Financial crisis and the risk of suicide – Advisor Perspectives

Reality is messier than spreadsheets – A Wealth of Common Sense

What to do when your side hustle becomes a drag – Vox

Behind the scenes of making a Netflix documentary – Mr Money Mustache

Best option – Humble Dollar

Value shares mini-special

The linking of stock multiples and interest rates is overdone… – Albert Bridge

…but have you looked at the correlations with inflation? – Klement on Investing

Naughty corner: Active antics

Why is active fund selection so difficult? – Behavioural Investment

US equities now look pretty undervalued – Morningstar

The learning mindset for active investors – Neckar’s Minds and Markets

Blackstone-backed song rights machine suffers growing pains [Search result]FT

The UK’s top 40 dividend stocks – UK Dividend Stocks

Jeremy Grantham: entering the super-bubble’s final act – GMO

Kindle book bargains

I Will Teach You To Be Rich by Ramit Sethi – £0.99 on Kindle

How To Own The World by Andrew Craig – £0.99 on Kindle

Quit Like A Millionaire: No Gimmicks, Luck, or Trust Fund Required by Kristy Shen – £0.99 on Kindle

Way Of The Wolf by Jordan Belfort – £0.99 on Kindle

Environmental factors

Investing in (unlisted) Thrive Renewables – DIY Investor

Shades of green in ESG – Humble Dollar

Killing invasive species is now a competitive sport – New Yorker

He was protecting our oceans, and then he disappeared – BBC

Why birds changed their tune during the pandemic – Atlas Obscura

How Facebook is saving snakes – Scientific American

Off our beat

The super-rich ‘preppers’ planning to save themselves from the apocalypse – Guardian

Chesterton’s Fence: a lesson in second-order thinking – Farnham Street

There’s some good news in the battle with long Covid – Guardian

How to create a simple newsletter to support your business – Spilled Coffee

The lesson from Lord of the Rings ‘review bombing’ – UnHerd

New studies further confirm link between ultra-processed foods and cancer – Delish

Michael Sheen rallies the Welsh [Video] – via Twitter

Stewart Lee: how will history recall Bad King Boris? – Guardian

And finally…

“That was leadership, it was doing the right thing, it was duty, it set an example.”
– Archbishop of Canterbury’s praise for The Queen at her husband’s funeral

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Get healthy to make more time to make more money. Plus the rest of the week’s good reads…
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