What should you know?
Your bonuses, if used wisely, can rapidly accelerate your journey to financial independence.
If you had invested your annual bonus of US$10,000 into the S&P 500 every year over the past decade, you would have nearly doubled your money.
The chart below shows the value that each year’s bonus from the last 10 years would have grown to by the end of 2023. The bonuses invested for the longest time have grown to the highest value:
Why should you care?
Successfully building wealth is achieved through the repetition of positive financial behaviours.
Allocating a significant portion of your bonus to long term investments each year is one of those behaviours.
The earlier you get into the habit, the bigger the long-term rewards. As the years pass, you will start to see your bonuses compound in value and in turn, fast forward you to financial independence.
