Becoming a millionaire is easier than you think. Wouldn’t it be nice to have a million dollars? Even at 5 percent interest rate in retirement, that amount is enough to put $50,000 in your bank account each year, to add to whatever income you may have.
Financial experts say that having a million dollars in your bank account when you retire is entirely possible. As long as you’re under fifty years old, you can get on the path to turning $50,000 into $1M in 25 years. It’s even easier to do that if you’re under 40; if you follow these steps, you can have a million dollars in your bank account by the time you are 65.
The first thing you need to realize is that saving money is imperative for this million-dollar goal. Unfortunately, saving money is something that not many people are good at. Young people, especially, seem to have poor money management skills. If you accept the value of saving money, you’ll find it easier to make the choices you need to make in order to get started on saving your first million.
Next, you need to familiarize yourself with the compound rate table.
The compound rate table is practically a mathematical fact. So if you start with an investment of only $10,000, you will have more than $450,000 in your bank account after 40 years, even at just a 10% growth rate. This table shows you the value of your money and what your investment could grow into in the future. It also serves as great motivation for saving your money and investing it where it will grow over time.
For instance, you can opt for the cheaper car and save the $10,000 for your future. Each cup of coffee you buy at Starbucks today is costing your future self up to $225. Flying first-class instead of coach? Say goodbye to the $54,000 your future self could have earned. Can you really afford to have all these luxuries?
Look at your habits and figure out where you can save money so you can come up with an initial investment. You never know how much each $10,000 you spend today is going to cost you in your 60s or 70s.
Financial experts recommend looking beyond the conservative 10 percent rate. If you look at the figures under the 20% growth rate, you’ll realize that each dollar you save now grows into $237 dollars in just 30 years. Remember, you only have to average better than 10 percent returns so you can ensure that you’ll be in excellent financial shape in the future.
It all begins with saving your money today. You need to make smarter decisions about your spending, whether it’s that $5 cup of coffee every day or that $500 ballgame every other weekend. Do you really need a big wedding? Do you really need to remodel your house to add that deck out back? These are all decisions that will affect your financial state once you’re retired. Just think of how much you’ll enjoy the payoff once you’re retired.