Do you ever wonder why you should save? When the thought of you being rich comes to mind do you believe it is not possible? Many of us loose the hope of achieving something very quickly because we do not have all the information to make informed decisions. So instead of trying to learn and achieve we just give up. It does not have to be this way, anyone can be rich.
Well what if I told you that by saving only $50 a month starting at the age of 25 by the time you hit retirement you would have a quarter of a million dollars? You can, and it is easy. Simply open an account with a good mutual fund (It can even be an index fund); have the money automatically deducted from your checking account every month and you are there! Below are a couple of charts of what your money would turn into!
All of these numbers are done based on a 10% rate of return, which is below the market average for the long term, which is just under 12%.
Save $25 a month
|
Years
|
Value
|
Amount Invested
|
|
5
|
$1,935.93
|
$1,500
|
|
10
|
$5,121.12
|
$3,000
|
|
15
|
$10,361.76
|
$4,500
|
|
20
|
$18,984.22
|
$6,000
|
|
30
|
$56,512.20
|
$9,000
|
|
40
|
$158,101.99
|
$12,000
|
Save $50 a month
|
Years
|
Value
|
Amount Invested
|
|
5
|
$3,871.85
|
$3,000
|
|
10
|
$10,242.25
|
$6,000
|
|
15
|
$20,723.52
|
$7,500
|
|
20
|
$37,968.44
|
$12,000
|
|
30
|
$113,024.40
|
$18,000
|
|
40
|
$316,203.98
|
$24,000
|
If you made the 12% at $50 a month over 40 years you would have $588,238.63. Now imagine what would happen if you saved more than $50 a month? Wealth is possible for everyone; the first step is to make the decision to do it!
Now you may be saying, but I don’t know what to cut back my budget is so tight. So I thought we could start a list of things that are $25 or less that we spend on and could cut back.
· Manicure
· 4 Latte – (not all of your daily ones – just 4!)
· A movie for two with popcorn
· A new book
· Pizza
What else can you think of to cut back on to increase your ability to become wealthy?
