Time is such a valuable commodity - it's a shame when investors squander it. Yet many waste a resource that can't be recovered.Time is an investor's most valuable ally. Returns increase exponentially over time, which is as close to magic as most of us will ever see. Putting time on your clients' side is a key element to financial success.

To see just how valuable this element is, let's consider the case of a 20-year-old wishing to retire at age 60 with $1,000,000. Assuming an 8 percent return, this future millionaire needs only to deposit $3,574 per year ($68 a week) to reach that goal. Over their 40-year career, they will only deposit $142,969 - the balance of the million will come from earnings on the account (see table).

Every day this investor waits to get started costs them in both annual deposits and total deposits over their career. The longer this investor waits, the more likely it becomes that they won't reach the proposed goal.

Time is a finite commodity for all of us. Once it's gone, it's gone. There is no getting it back. So, putting time on their side should be a top-level concern for all investors. It's never too early to start a long-term investment plan.

Investors who understand just how valuable time is will want to keep time on their side. An avoidable investor mistake can fritter away years of savings and effort, placing them right back at the starting point with little or no time to recover.

Help your clients avoid these common mistakes to keep time working for them:

* Raid the retirement account. A disappointingly huge percentage of workers fail to roll over their pension and profit-sharing accounts when changing jobs. The funds are used for everything from vacations to new cars. It's especially important to keep all their retirement accounts at work. While the amounts may seem relatively small, left to accumulate tax-deferred in an IRA they will grow to substantial amounts. For instance, $10,000 left to grow at 8 percent for 30 years will be worth $100,626 when it's needed for retirement.

* Take a flier. Some delusional investors rationalize that a series of high-risk investments will average out over time, and that a loss today can be made up by tomorrow's gains. These serial losers buy into one deal after another that sounds too good to be true, hoping for a huge payoff. This gambler's mentality has almost nothing to do with investing, and rarely leads to anything but financial ruin.

* Concentrated investments. Anything less than a fully diversified portfolio magnifies risk without increasing expected return. No investor should ever bear a risk that could be diversified away. They can't afford for all or a large portion of their savings to vaporize. The more concentrated a portfolio, the more opportunity for something awful to happen. Just ask any Enron employee how they like the company stock now. Avoid sector funds, individual stock holdings and funds with concentrated positions.

Keeping your clients' funds in play with reasonable investment strategies and constant discipline is just as important as starting early. Blowing a nest egg up along the way destroys their most valuable ally in the quest for financial independence.

Frank Armstrong III, CFP, AIF, is founder and principal of Investor Solutions Inc., a fee-based firm with $430,000,000 under management, and the author of The Informed Investor.

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