Much of this material was excerpted from my new book, Eight Steps to Seven Figures

Time is an investor's biggest ally. To understand why time is so important to investment success, you need to appreciate the power of compounding.

Einstein reportedly called the power of compounding "the eighth wonder of the world," for good reason. Over time, compounding turns a little money into a lot without any special effort on your part.

Remember this — the most important dollar you invest is the one you invest today. You'll never fully exploit the power of compounding unless you start now. Not a year from now. Not a month from now. Not tomorrow. Start investing now.

You might not have a lot of money. You may not know much about investing. It doesn't matter. It is impossible to build a better financial future without investing. So start today.

The benefits of starting to invest as soon as possible are evident in the following example:

--A 20-year old can achieve a million-dollar portfolio by age 65 if he or she invests just $67 per month (assuming an average annual return of 11 percent). Said another way, that 20-year old will invest, over the course of those 45 years, less than $37,000 in order to create a $1 million portfolio. That's the power of time. That's the power of compounding.

--If that 20-year old waits until age 30, he or she will need to invest $202 per month to reach seven figures by age 65.

--By waiting until age 40, an individual will have to invest $629 per month to reach $1 million by age 65.

--And if you wait until age 50 to begin your investment program, you'll need to invest an average of $2180 per month to have $1 million by age 65.

These scenarios make two important points. First, the sooner you start investing, the easier it is to build a seven-figure investment portfolio. Second, even if you start investing at age 50, you still have a shot at seven figures. But it will be much harder than if you had started earlier.

Overcoming Hurdles

I'm sure you have many reasons for not starting an investment program. No money.

No knowledge.

No time.

No broker.

Too old.

Too young.

I'm sure you think these are legitimate reasons.

They are not. There are no good excuses for not investing. I don't care how young or not so young you are. How rich or not so rich you are. How much you know or don't know. It has never been easier or cheaper to invest.

Never.

If you have just $50, there are literally hundreds of investment opportunities awaiting you. If your employer offers a 401(k) plan, you can invest as little as 1 percent of your salary. That means if you make $400 per week, you can invest as little as $4.

Four bucks.

If you prefer, you can invest via BUYandHOLD (www.buyandhold.com). BUYandHOLD allows you to buy stock with as little as $20. In short, there are no excuses for not investing. None.

Still don't believe me? Let's address popular excuses for not starting an investment program.

Excuse #1: I don't have any money to invest.

Most people don't have the luxury of a six-figure inheritance when they start investing. Where did they find the money to invest?

By far, the primary source of "start-up" funds for most successful investors is their regular paychecks. Successful investors squeeze investment dollars out of their paychecks by making those paychecks stretch.

I'm sure if you looked long and hard at your spending habits, you could come up with a few extra dollars every month:

Do you really need all those premium cable channels? ($15)

Do you really need cable television at all? ($35)

Do you need to talk to Betty Sue long distance every Wednesday when you could call her on the weekend and save a few bucks? ($5)

Could you rent one less tape at Blockbuster each week? ($10)

Could you take some leftovers to work once a week for lunch? ($16)

Do you still need all those magazine subscriptions? ($5)

That's $86 saved each month. That's $86 you could invest. Do you know what $86 per month, earning on average 11 percent year, grows to over 25 years? $137,000. And I've probably just scratched the surface of what you could save each month.

And what about those major purchases? Saving and investing just a small part of the money that sloshes around in those big transactions can provide a huge payoff down the road.

For example, do you need that $500 watch when the $100 watch will do just fine? That savings of $400, earning 11 percent a year for 25 years, grows to $6,100. That's the "real" cost of the watch. Not $500, but $6,100.

Understand I'm not recommending that you live like some miser who reuses tea bags 50 times and stuffs pillows with dust bunnies. I'm not suggesting some big austerity kick. What I am saying is that all of us waste money on things that provide very little, if any, lasting pleasure. Recognizing those instances of wasteful spending can go a long way toward shifting from a spending mentality to a saving mentality.

Payroll deduction. One way to stretch your regular paycheck is to leave some at the office. That's the beauty of savings and investment plans built around automatic payroll deductions. You never see the money, so you never miss it. Many successful investors utilize payroll deduction to fund 401(k) retirement programs. By far, the 401(k) plan is the investment vehicle most responsible for creating everyday millionaire investors. Many of the investors I surveyed generated at least 35 percent of their seven-figure portfolio from a 401(k) plan.

"Found" money. Many successful investors got their start with what they called "found" money. Found money may be funds from working overtime, a raise, a bonus check, holiday/birthday gifts, or an unexpected inheritance.

Proceeds from a property/real estate sale. A number of millionaire investors said they got start-up funds by selling a home. Bottom line: You have the money to invest. You just have to be creative in capturing it.

Excuse #2: I don't have enough money to invest.

Just because you can't afford to invest $1000 or $5000 doesn't give you an excuse for sitting on the sidelines. Do you have $20 to invest each month? That's all it takes to invest via BUYandHOLD. Does your employer offer a 401(k) plan? If so, you can contribute as little as 1 percent of your salary. You do have enough money to invest. You just don't know it.

401(k) Plan

The 401(k) plan is an investment program established by an employer to assist employees in saving for retirement. Under a 401(k) plan, part of your pay is deposited into an account in your name. These contributions are made with pretax dollars. In other words, neither federal nor state income taxes are withheld from this money. Because the amount you contribute to your 401(k) is not included on your W-2 form as taxable wages or income, your 401(k) contributions reduce your yearly tax bite. Funds in your 401(k) grow tax deferred. You'll pay no taxes until the funds are withdrawn. Better still, in many 401(k) plans, the employer matches a portion of your contribution. That's free money.

Why 401(k) plans are especially relevant for our discussion here is that the investment minimums are incredibly tiny. You can invest as little as 1 percent of your salary in a 401(k) plan. If you make $100 per week, you can put just one dollar in your 401(k) plan.

The 401(k) single-handedly has created more everyday millionaire investors than any other investment vehicle. If you are not taking full advantage of your employer's 401(k), you are making a big mistake. You have no business investing in any other investment until you contribute the maximum allowed by law to your plan.

Excuse #3: I don't have the time.

How much time do you spend watching television each week? Don't know? I'll tell you.

The average adult spends roughly 28 hours each week watching television. That's according to Nielsen Media Research.

Hard to believe? Not really. Think about it. You probably watch one of those morning shows to catch the weather and traffic. At night, you watch that favorite show or two. You probably watch the evening news before you go to bed. And you might sneak a peak at Dave or Jay or Conan when you're under the covers. It adds up.

And how about your computer? How long are you online every day? Thirty minutes? An hour? More?

Yes, I know you're busy. Everyone is busy. With kids. With work. With life. But let's face it, we waste a lot of time on things offering very little payoff.

That's why I cringe when someone tells me he or she doesn't have enough time for investing. You have enough time. It's just a question of priorities. And what could be more important than your family's financial future?

Investing is not a full-time job. It's not 40 hours a week with overtime.

One way to control the amount of time necessary to monitor your investment program is by not overdiversify your investments. If your portfolio is exclusively stocks, you can have a nicely diversified portfolio with just 15-20 stocks. If you supplement your portfolio with mutual funds, the number of stocks can be reduced. A portfolio with only five stocks and four mutual funds is still reasonably diversified.

You also reduce the need for portfolio monitoring if you commit yourself to a long-term investment strategy. If you plan to hold investments for a long time, you are not forced to worry about every little blip in price or every little news item. You can focus your research efforts on the big picture and not the time-consuming minutia of daily trading.

Focusing on simple, understandable investments also reduces the time required to track your investments. You don't have to own exotic derivative investments that require the math skills of Pascal to understand, or complex limited partnership that even the IRS doesn't understand. Keep it simple.

Excuse #4: I'm too young.

If time is the most important factor in an investment program, then it's impossible to be too young to be an investor. Indeed, you should start an investment program as early as possible.

If your youngster shows an interest in investing, it has never been easier to get him or her started regardless of age. Once an individual reaches the age of majority (18 in most states), he or she may have an investment account registered solely in his or her name. Youngsters under the age of 18 are not permitted to have their own brokerage accounts. However, several ways exist for parents to introduce interested youngsters to investing.

I think individual stocks are probably better for youngsters than other investment vechicles because stocks are more interesting teaching tools. What you are trying to do by starting a youngster investing is to instill discipline and teach about the capitalistic system. Those lessons will probably hit home more if they feature a company in which the child can relate rather than a truly "faceless" security.

If you decide to establish an investment account for a youngster, consider carefully how you want the account registered. If you choose to have the account in your own name, you will be responsible for taxes on the account. The good thing is that you also retain complete control over the account for as long as you want.

An alternative is to set up a custodial account under the Uniform Gift To Minors Account (UGMA) or the Uniform Transfer to minor Act (UTMA). Funds in the account are in the minor's name and social security number and are considered to be owned by the minor. Dividends paid on the account are taxable, most likely at a preferred tax rate. The adult custodian is responsible for the account until the minor reaches the age of majority. Any withdrawals from the account are payable to the custodian on the minor's behalf until that time. However, once the youth has reached the age of majority, which is 18 in many states, control of the account reverts to the child to do with as he or she sees fit. This is the downside of setting up a custodial account. Parental control is lost at the age of majority. Another consideration is that college financial aid decisions could be impacted if a child has sizable assets in a custodial account. It is important to understand the pluses and minuses of custodial account before registering investments in that form.

One way to draw a youngster's interest to an investment program is by offering "matching" funds. Make a deal with your kids: For every dollar they save or invest, you'll match it with another dollar. Consider it your child's "401(k) plan" for taking out the garbage, cleaning around the house, doing the dishes, walking the dog, mowing the lawn, etc.

Excuse #5: I'm too old.

You do have time to build a decent financial future.

You have more time than you think. We are living longer. Many people live into their 70s and 80s, and the number of individuals reaching 90 and even the century mark continues to swell.

Bottom Line: Don't compound your mistake of not starting an investing program earlier by refusing to start now. It can still have a huge impact on your financial future.

Excuse #6: I don't have a broker.

This might be the worst reason for not starting an investment program. You don't need a broker. DRIPs, no-load stocks, mutual funds, 401(k) plans -- none of these investment vehicles requires a broker. You can get started on your own, with little money in most cases.

BUYandHOLD

If you want a broker, it's never been easier to find one, nor cheaper to use one. One company in which I'm involved offers an easy way to buy stocks with very little money. That company, BUYandHOLD, is a unique online brokerage concept. BUYandHOLD takes the best of the DRIP world — low-cost investing with small amounts of money and combines it with the best of the online brokerage world — more timely buy and sell execution and consolidated account statements. Individuals may purchase stock through BUYandHOLD for just $2.99 in brokerage fees. Minimum investment is just $20. BUYandHOLD will buy both full and fractional shares of stock for investors. You'll also receive a consolidated statement showing all of your holdings. No deposit is required to establish an account. You can purchase shares with a check or by having your bank account automatically debited. For more information on BUYandHOLD, visit the Web site — www.buyandhold.com.

Excuse #7: The market's too high.

It continues to surprise me when someone says the market is too high. Nobody — Alan Greenspan, Peter Lynch, Chuck Carlson — nobody knows whether the market is too high at any given time.

Guessing whether the market is too high is a loser's game. You can't do it consistently over time. Investing is an inexact science. Every investment you make comes with uncertainty. Successful investors play the percentages. What you know for sure as an investor is that time is the greatest ally your portfolio has. Delaying an investment program because you think the market is "too high" means keeping money on the sidelines. And keeping money on the sidelines limits the power of time.

So I ask you, which should you do? Keep money on the sidelines because you guess the market is too high? Or invest regardless of the market level because you know that doing so maximizes the power of time?

Moral of the story: There is never a bad time to start an investment program.

Conclusion

The most important step in the financial planning process is deciding to start a saving and investment program. This is often easier said than done. You may have to break old habits and start new ones. You may have to sacrifice current consumption. However, you'll never get to financial independence without starting.

So get started NOW.

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