How to Money · Wednesday, July 15, 2026
Paul Merriman emphasizes the critical importance of the first five years of investing, stating that they can account for up to 40% of an individual's retirement funds. He argues against the concept of 'consumption smoothing,' which suggests delaying significant investing until later in life, by highlighting the magic of early compounding and the opportunity to take on more calculated risk at a younger age.
“Because my belief is is that that first five years, assuming that you invested basically the same amount of money over a long period of time, that first five years can be worth forty percent of what you have to live on by the time that you are sixty five at retirement.”
“And on top of that, when you're very young, you really can afford to take more risk, smart risk, always smart risk, but more risk than when you get older. And so those early dollars, they are absolutely magic.”