The Tortoise Characteristic
- the slow and steady nest egg

A few dollars here, a few dollars there... sooner or later it adds up to real money.

The slow and steady approach to investing is nothing really new. You add some money each month to a savings account, and years later you have quite a nest egg.

The main challenges for the slow and steady approach are discipline and availability of cash. Well, the discipline part of it is completely on you, so we'll leave it there.

To make sure you can afford the monthly contributions to your nest egg, use extra money from when you get a raise at work.

Each month take 2% of your raise, and deposit it to your nest egg savings account. For a $1,000 raise, you would deposit $20 per month.

In subsequent years, increase your monthly contributions by 2% of each new raise. So, if you get $1,250 for your next raise, you increase your deposit by $25, and your total deposit becomes $45 per month.

This approach uses 24% of every raise to fund your nest egg. Your income before each raise should already cover your expenses, and that never gets touched.

The table shows how the strategy might play out for a $36,000 salary.

25 year nest egg
yearly raise of 2.5%
Year Salary Raise 2% Deposit Nest Egg
1 $36,000 $900 $18 $18 $216
2 $36,900 $923 $18 $36 $653
3 $37,823 $946 $19 $55 $1,318
4 $38,768 $969 $19 $75 $2,215
5 $39,737 $993 $20 $95 $3,350
6 $40,731 $1,018 $20 $115 $4,730
7 $41,749 $1,044 $21 $136 $6,360
25 $65,114 $1,628 $33 $615 $86,501

Here are 25 year nest egg totals for other starting salaries.

25 year nest egg
yearly raise of 2.5%
Year Salary Nest Egg
25 $20,000 $48,056
$24,000 $57,667
$28,000 $67,279
$32,000 $76,890
$40,000 $96,112
$48,000 $115,335
$56,000 $134,557
$64,000 $153,780
$72,000 $173,002
$80,000 $192,225


The slow and steady approach should not be your only nest egg strategy. It should be only one component of your overall plan. You should continue to make 401k or IRA contributions, and look for other investing ideas.

The tortoise may not be flashy, but it eventually reaches its destination. Follow the slow and steady principle, and likewise, you can reach your nest egg goal.