Yes, I said it. And it’s true. Getting Rich is easy.
It’s really just a matter of priorities.
Plus some simple math.
Someone once said that Stephen Coveys “7 Habits of Highly Effective People” was common sense that we needed to be reminded of. The same could be said about the simple concept of compounding interest.
Just Google or use this link to a “Compound Interest Calculator“, and play with the numbers. It’s fun actually.
For example, if you’re 20 years old, and you invest $200 a month with an 8.5% return until retirement, at 65 you would have about $1.2 million.[Tweet “Common sense that we need to be reminded of…”]
Or, say you’re 20 years old, you get a full time job netting $20,000 a year (call it $1500 a month). You suck up to your parents and live there until they have trouble remembering your name. In the meantime you save 90% of your income. At retirement you would have something like $9 million +. If your boss gave you an annual 2% pay raise to keep up with inflation and you save it too, make that about $11 million.
Now let say you’re not 20 anymore. Maybe you’re 40 years old. This is where minimalism really kicks in and helps.
Say you have a half decent two income family and you start cutting out the wasteful shopping, buying crap that gathers dust in your garage, you even give up cable TV. Ouch. I know. Seems drastic but it’s not. We gave up cable and kept Netflix and have more than enough great stuff to watch when we want to. We also got rid our landline phone.
Anyway, you cut back. No daily trips to Starbucks, simpler vacations, cut out the bottled water and get a Brita. Google “frugal” and you’ll see a million ways to cut back without suffering.
So now you start saving $1500 a month at 8.5% when you’re 40. At 65 you’ve got something around $1.5 million.
It’s really just a matter of priorities, and patience. Trying to get rich quick; now that’s hard and risky.
Do you want a Starbucks everyday or an extra $1.5 million for retirement? Just sayin’.
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This is where I says thanks to people who have helped me in one way or another with my site. Today I want to thank a couple of fellow bloggers who’ve provided some great insight to blog building. Check them out.