23. The Earlier the Better

23. The Earlier the Better

My 30–40 years of practice, compressed and downloaded, still takes 5 years. No rush. Time is the only thing in this book that is irreversible. Principal can be borrowed, cognition can be learned, strategies can be adjusted — but the years that have passed, no one can buy back. So in this section I want to make “the earlier the better” as concrete as possible.

Compounding’s Extreme Sensitivity to Start Time

A set of numbers to demonstrate. Assume 12% annualized, NT$10,000/month invested:

Same monthly investment — start 10 years earlier vs. later differs 3×; 20 years earlier differs 10×. And those 10 or 20 years’ gap cannot be filled by investing more later — you can never buy back lost time.

Convert to any currency — the math is identical: the back end of the compounding curve is the meat. Start 10 years late and you cut the thickest meat off and give it to someone else. Start 10 years early and you keep that meat for yourself.

Why Is “Starting” Endlessly Delayed? I’ve watched students for 20+ years and found that people who “can’t start early” usually don’t lose to lack of money or time — they lose to one of two mindsets: Mindset 1: “Wait until I understand to start.” They keep pushing the start: “let me first watch all 500+ videos before I invest.” “Let me first read ten investing classics.” “Let me observe the market for a year before deciding.” But the day they finally feel they “understand” is often 5 or 10 years out. My experience: my 30–40 years of practice, compressed and downloaded, still takes 5 years. Someone starting from zero needs at least 5 years to really “understand.” But 5 years of not investing vs. 5 years of investing while learning are worlds apart. My suggestion: watch the videos, but put the first money in today. Start small, with money you can afford to lose, so the action of “starting” happens; then hold and learn, learn and add. Mindset 2: “The one who knows more goes slower.” I have seen too many veteran finance-industry professionals come to CLEC, then take 5 or more years to complete the mental transformation. Not because they’re stupid — because their heads are packed with 20 years of “should buy, should sell, should allocate, should stop-loss” reflexes. Clearing those reflexes is harder than starting from zero. People who already know too much need to subtract before they add. If you fall in this group — finance, banking, insurance background, CFA holder, former fund manager — be more patient with yourself. When “I should stop-loss” or “I should reallocate” pops up in your head, hold that hand still, come back to this book, back to the 200-year hard evidence, back to that 26-year 12× QQQ long-term curve. Regardless of which group — the best time to start was 10 years ago; the second best is today.

A Direct Sentence for the Young

If you’re under 30 and have your first stable income, summarize this section in three sentences on your fridge:

1. Don’t wait until “you understand” to start — hold-and-learn beats “learn-then- start” by miles.
2. Take out a credit loan with your first paycheck — NT$1M of low-interest credit, lump-summed into an index fund, long-term beats slow saving plus DCA.
3. Don’t raise a house — leave the 10–15 years of life when you should be most free to the index fund, not a concrete box. Execute these three, and 10 years out, the you today is the envy of the “I learned too late” you of the future.

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Key Points

One, compounding is extremely sensitive to start time: NT$10K/month at 12% — start at 25 (40 years) → ~NT$100M; start at 35 (30 years) → ~NT$30M; start at 45 (20 years) → ~NT$10M. 10 years earlier = 3× more; 20 years earlier = 10×. The gap is unfillable because time is the only non-renewable resource. Two, two mindsets that delay starting: “wait until I understand” — but even compressed, my 30–40 years still take 5 to download; by the time you “understand,” the fattest window is gone. Finance-industry veterans “know too much” — 20 years of reflexes need to be cleared and rebuilt; they need to subtract first. The cure is the same: start today. Three, three sentences for the young: don’t wait to “understand” to start; take out credit with the first paycheck and lump-sum the index fund; don’t mortgage your 20s and 30s to a house. Get these right and in 10 years you’re the one running furthest among peers.

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Iron Law VIII: Go With the Tide

● Transition Profit: Wealth Comes from the Trend ● Live and Die With Human Technology ● 433 / 442 / 613 Asset Allocation How far you see is how high your wealth goes.

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