We all dream about becoming a millionaire someday. I know I did since I was in my early twenties… The truth of a matter is we CAN indeed become a millionaire. However, it does take time with patience and the younger you are the better chance you have in achieving your goal of becoming a millionaire.
There are so many people out there just spend money without really thinking about saving. That’s why many Americans spend more than they earn! People who are in this category obviously do not have any financial goals. We must realize that becoming wealthy does not come easy unless of course you have inheritance knocking at your door. The truth is we have to get in the habit of a disciplined lifestyle to become wealthy and to achieve your financial goals. Having a budget helps too. This means we cannot just spend money without thinking. Building your wealth involves making sacrifices in your lives. Below is a list of ideas where we can save money by changing our lifestyle.
Once you start sacrificing more (spending less) and start saving your money, you should immediately start your own retirement plan especially when you are young. You should not have any reason or excuse not to start a retirement plan in 401K and/or IRA. The younger you are the more you can save in these types of retirement plans, resulting in great saving for you and your family. I personally have IRA and 401K and have been contributing the maximum amount every year. Let’s use a scenario to see how much we can actually save with ROTH IRA plan.
- Let’s say you are currently 24 years old.
- If you deposit $3,000 per year (that’s only $250 each month!) in a ROTH IRA at 8% average annual return, you’re total savings will be more than $900K when you turn 65 years old.
- The total annual contributions adds to $123,000 ($3,000 x 41 years).
- The best part: ROTH IRA provides interest free meaning when you take out the money at age 65, you do not need to pay any interest!
photo: acultura.org
40 years is a daunting length of time to save. Hopefully, we can all make a bit more income every year and save more. That way we can get there before 65.
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Becoming wealthy takes a lot of time! Spending is easy and in this moment. Not everyone realizes the importance of thinking long-term.
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