Here’s How Much Money You Need To Save Each Day To Become A Millionaire
Becoming a millionaire can seem like a pretty lofty goal — or even
just a fantasy — but according to financial adviser David Bach in his
book “Smart Couples Finish Rich,” all it takes is a little planning.
It might seem impossible, but starting off saving just $2 a day when you’re 20 or $20.55 when you are 40 can get you to be a millionaire by the time you’re 65.
According to Bach, the key to getting rich is sticking to a savings and investment plan as early as you can. So how exactly will $2 a day get you to be a millionaire in time for retirement? Bach created a chart, which Business Insider recreated, to illustrate how you can build your wealth over the years.
The chart assumes you start with no money invested, and it assumes a 12 percent annual return. That may be a little aggressive—even the historically standard baseline of an 8 percent return on investment may be considered too aggressive these days—but it can give you an idea of what a few dollars a day can do.
The key to accumulating wealth is to not just save money but to invest and let it multiply. According to the authors of the wildly popular “The Millionaire Next Door: The Surprising Secrets of America’s Wealthy,” on average millionaires invest 20 percent of their income (and, accordingly, the majority of them live well below their means).
Robert T. Kiyosaki echoes this advice in “Rich Dad, Poor Dad: What The Rich Teach Their Kids About Money That The Poor And Middle Class Do Not!,” which bills itself as the #1 Personal Finance Book of All Time (and indeed over 27 million copies of the Rich Dad series have been sold worldwide). Earning a lot of money won’t automatically lead to wealth. It’s how much you keep and what you do with it that counts.
Whether you are just starting to save money now or want to increase your investments (to get that oh-so-essential return!), the process can be confusing and overwhelming. Don’t give up though. As “The Millionaire Next Door” authors William Danko and Robert Stanley advise, financial planning takes time—but it’s time very well spent.
An article on GetRichSlowly summed up this point:
The long and short: The next time you’re thinking of getting that coffee or green juice, you might want to consider setting that money aside instead — it will definitely pay off later.
It might seem impossible, but starting off saving just $2 a day when you’re 20 or $20.55 when you are 40 can get you to be a millionaire by the time you’re 65.
According to Bach, the key to getting rich is sticking to a savings and investment plan as early as you can. So how exactly will $2 a day get you to be a millionaire in time for retirement? Bach created a chart, which Business Insider recreated, to illustrate how you can build your wealth over the years.
The key to accumulating wealth is to not just save money but to invest and let it multiply. According to the authors of the wildly popular “The Millionaire Next Door: The Surprising Secrets of America’s Wealthy,” on average millionaires invest 20 percent of their income (and, accordingly, the majority of them live well below their means).
Robert T. Kiyosaki echoes this advice in “Rich Dad, Poor Dad: What The Rich Teach Their Kids About Money That The Poor And Middle Class Do Not!,” which bills itself as the #1 Personal Finance Book of All Time (and indeed over 27 million copies of the Rich Dad series have been sold worldwide). Earning a lot of money won’t automatically lead to wealth. It’s how much you keep and what you do with it that counts.
Whether you are just starting to save money now or want to increase your investments (to get that oh-so-essential return!), the process can be confusing and overwhelming. Don’t give up though. As “The Millionaire Next Door” authors William Danko and Robert Stanley advise, financial planning takes time—but it’s time very well spent.
An article on GetRichSlowly summed up this point:
Prodigious accumulators of wealth spend nearly twice as many hours per month planning their investments as under accumulators of wealth… You don’t have to earn a big six-figure salary for planning to pay off. In a survey of 854 middle-income workers, Danko and Stanley found ‘a strong positive correlation’ between investment planning and wealth accumulation.Finding a trusted financial planner to help guide your budgeting and investments can be a good use of your time and money. And if you’re still not sure how much you need to be saving, try this handy savings calculator.
The long and short: The next time you’re thinking of getting that coffee or green juice, you might want to consider setting that money aside instead — it will definitely pay off later.
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