Today I was thinking about how it’s important to begin saving for retirement at a young age. Everyone knows that the sooner you start investing, the better due to the magic of compound interest.

Over time, if you re-invest your returns and continue adding money to your portfolio, you can grow a small amount of money into a large nest egg.

“If a 19-year-old starts with $5,000 and makes the maximum contribution each year until 67, the ending balance [roth ira] is $1,164,985 if it grows at a 5 percent annual clip. That’s over $330,000 more than what someone would end up with if they waited just six years, until age 25, to start the Roth and then saved the same amount.” – New York Times.

What people never talk about is the compounding magic that happens when you invest small amounts of effort over a long duration.

For example, if you started a blog today in a good niche and wrote one quality post per week, you would begin to see a bit of a fan-base gathering after a year and a half and would likely also be getting traffic from numerous sources.

That is an asset that you can use to promote products or make money on the side. It might only take 2-4 hours per week worth of dedication in terms of writing, but over a very long duration (4 years), the effort compounds and you have an asset that you’ve created that can generate revenue.

The same can be said of other hobbies, whether that’s making youtube videos, selling things on Etsy, or podcasting.

The key here is to invest your time in creating mini-products over a long duration. A youtube video or a blog post is a mini-product that is consumed. It helps if those products continue to be relevant or solve problems for the customers a year from now.

We’re always taught to earn money to be able to invest in assets (businesses on the stock market, bonds, real estate) to develop a nest egg. Why don’t we also invest our time in the creation of assets that, over a lifetime, grow in value?