![]() The saying is true a penny saved is worth more than a penny earned. On the flip side, I know plenty of people who have managed to accumulate a nice net worth on merely good incomes. I know plenty or high-income folks without a pot to piss in – I do have the pleasure of living in a Beverly Hills zip code. After all, it is not what you make but what you keep. ![]() credit should read JOSH EDELSON/AFP/Getty Images) GettyĪssuming you’ve overcome your irrational fear of the stock market and have crafted the perfect investment portfolio (or had the help of a fiduciary financial planner to create the best investment plan for your situation) if you don’t save enough move along the way you will never become a millionaire. This dog is a shopping cart is cute, not saving enough is not. Related: The First Million is the Hardest How to Build A Million Dollar Net Worth The same end result, but you can get away with saving a whopping 95% less! Putting this another way, if you saved $1354 per month from 22 to 70 and earned 10% you would have accumulated over $19 million. This is a simple example of the magic of compounding interest. I’m confident we could all find a way to come up with $2.50 per day to become a millionaire. Option 2: However, with the help of compounding interest, if you were able to earn 10% (after taxes and fees), you would need to save just $71 per month.That will be tough or impossible for most people. Option 1: Starting at 22 and earning 1% (after any taxes and fees) you would need to save $1354 per month to become a millionaire.Related: Will Fear Of Investing Leave Generation X Broke In Retirement?Įxample How to Accumulate a Million Dollars:ĬASE STUDY 1*: Let’s say you wanted to accumulate 1 million dollars by the time you were 70. By not taking any investment risk you are likely guaranteeing what you are most afraid of, running out of money in retirement. In my opinion, the risks of not investing are even greater. While I will admit, there are risks associated with investing in anything from stocks, bonds, ETFs, mutual funds and even buying a home. If you want to achieve and maintain financial independence, you will need the help of compounding interest via some type of investing. You may feel safe, stuffing your life saving under the mattress but you are losing money each and every day after inflation eats away at your purchasing power.
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