Do you want to become a millionaire?
The game plan for you is simple: try to get as much of your money as you can into income generating things instead of pouring it down the consumer spendthrift’s gurgler.
US money expert Larry Waschka pinpointed the 7 winning habits of the successful wealth builders in his Complete Idiot’s Guide to Getting Rich.
Here they are;
- Save every month. Great idea!
- Stay out of debt. However, good debt can be a good wealth-builder!
- Shop around before buying. Yep, it’s a big saver.
- Don’t be afraid to buy pre-loved goods. Yep.
- Take care of your stuff. So basic but so smart!
- Become a share market player. Tick!
- Take time to plan your future. Spot on and this book will help you do that.
The early starter vs the late starter
Imagine two young people. One is Eddy while the other is Lucy.
1. The early starter
If Eddy socks away $2,000 a year for only nine years in a fund that returns 9 per cent, which I concede is pretty high (that is, between 22 years of age and 30) and then parties for the rest of his life until he retires at 65, then the delivered nest egg would be $579,468.
Once again, this assumes an annual return of 9 per cent, which is a fairly reasonable rate to use for a long-range calculation. By the way, the stock market returns 10 per cent per annum over 10 years, so we’re talking about being a high growth, quality super fund.
2. The late starter
OK, let’s look at Lucy, who gets serious at age 31. Lucy starts putting in $2,000 at 31 and keeps doing this until she’s 65. That means she saves for 35 years and puts in $70,000. Look at her bottom line — $470,249.
Eddy puts in $18,000 and collects $579,468. And if Eddy keeps slamming his $2,000 in until retirement, he ends up a millionaire the easy way!
By getting your money knowledge and plans right, and letting compound interest cut loose, the final dividend can be sensationally rewarding.
Obviously, the intention here is to help you get your dollars heading in the right direction and make the ordeal by finance more sufferable. Think about what you are doing with your money now and ask yourself the question: could I save $40 a week to throw into super, which would give you a little over $2,000 a year and put you on the road to riches.
Of course, the saving effort could easily be used to grow your riches via a property but you’d need to do a lot more homework than getting your money into a top 10 super fund.
I guess the most important thing is that you have to want to get richer. If you do, then you have to start make changes, which sounds like a super idea!
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