The wealthiest people around start planning and saving for future expenses far earlier than is strictly necessary. One great example can be seen in college fund planning. Wealthy Americans prepare financially for their kids to go to college while they’re still infants. The average total cost per year now sits at almost $36,500, meaning a four year education is likely to require almost $150,000.
The combination of compounding returns and time makes this gigantic figure a manageable feat when spread over the intervening 18 years between birth and enrollment (with doubling occurring roughly every seven years, leading to about two and a half doublings). Even without considering interest or other value accumulation, savers will need to set aside a little over $8,300 per year compared to the full yearly sum required during just a child’s time in high school or during each successive year of college!
Spreading required savings goals out over huge spans of time makes them far more manageable. The world’s wealthiest, as well as its poorest know this to be true, but those who make and maintain massive fortunes act on this knowledge with far greater regularity.