Time is one of the most important factors when it comes to growing your nest egg: The sooner you start, the more time your money has to work for you. In the business of finances, it's called the time value of money, and successful investors take full advantage of it. Part of the time value comes from your saving and investing; with more time, you'll be able to put away more money. A bigger part, though, comes from the magic of compounding.

Compounding sounds confusing, but it's really quite straightforward. Compounding refers to the money generated by your investments earning money. For example, you deposit $1,000 into your bank account and earn $100 in interest on that deposit the first year. The second year, you earn interest on the entire amount in your account — $1,100 — not just your initial investment. By reinvesting your earnings, you can fully capture the power of compounding and watch your wealth grow more quickly.

So even if two people put away the exact same amount of money, the one who does it first will end up with more in the long run — and that's why it's critical to start right away. For example, if you invest $10,000 with an average annual earnings rate of 5 percent, in just ten years your initial investment will have grown to $16,290. But if you let that $10,000 work for thirty years, you'd walk away with $43,220. The difference is due solely to time. Still not convinced time can be your most powerful investing asset? Consider this: If you invest $25,000 — more than double that $10,000 investment — at 5 percent for ten years, you end up with $40,720, about $2,500 less than if you put away $10,000 much earlier on.