Instead of waiting until you have a lump sum of money, it's better—and easier—to invest smaller sums regularly. Most people wait until the end of the year—or even until April 15th of the next year—to make a contribution to an Individual Retirement Account (IRA). If you wait until the end of the year to put $5,000 in your IRA account, after 30 years it will be worth $590,677 (assuming an average return on equities of 8%). That sounds pretty good, but if you invest that $5,000 in equal installments of $417 each month over a year, and keep it invested for the same 30 years, your IRA will be worth $769,145! The extra $178,468 that you will have at retirement is your reward—thanks to the power of compounding—for putting your money to work earlier.