However, I do love having a spending plan.
There are many people out there with big-name firms behind them, trying to sell you crappy investment products to earn a hefty commission. When they follow the confusing "best interest standard" or suitability standard, they only have to show that something is ok for you rather than your best option. If your financial advisor is not a fiduciary, they are not legally obligated to put your best interest first. REASON #7 You Aren't Getting Fiduciary Financial Planning Advice Likewise, healthy living also makes for a more enjoyable retirement. While I am a financial planner, not a medical professional, I know being healthy allows many people to work longer (if they choose). I am aware that real food (aka healthy) will cost more than processed junk food (with little real nutritional value), but this is the one area where I almost always advocate for people to spend more. Exercise (more) and increase the health value of your food. If you don't have a primary physician, get one. Spend money to ensure you get all of the necessary screening and physical exams that your health care professionals recommend. Without your health, no amount of money will be able to buy back your quality of life. REASON #6 You Are Making Unhealthy ChoicesĪccording to a recent US Trust study, ninety-eight percent of millionaires consider good health to be their most important personal asset. your chances of a happy and healthy retirement. Unhealthy Food like Chick-Fil-a can make it harder to become a millionaire. GET STARĪRTED NOW! No matter your age, the sooner you get started, the better off you will be. Just starting at 40 versus 22 translates into needing to save nearly six times as much per month. Remember, these numbers continue to grow the longer you wait.Assuming a 10% net return on investments, you would only need to save $442 per month to become a millionaire.That is $28,596 per year to become a millionaire. If you earned 1% net of fees and taxes, you would need to save $2,383 per month.That tiny savings rate can grow over time into something substantial.ĬASE STUDY 2*: Let's say you just turned 40 and want to become a millionaire by the age of 70. I bet you will be surprised how you don't even miss the money you are socking away. Even if you can only save a tiny amount, you will be better off than if you never started.
There will never be a better day to start saving than today. Conversely, I know plenty of people who have accumulated a fantastic net worth on merely good incomes. I know plenty of high-income-earning folks who have a negative net worth. After all, it is not what you make but what you keep. REASON #2 You Choose Not to Pay Yourself FirstĮven with the perfect investment portfolio, if you don't adequately fund it for your financial goals, you will never become a millionaire. To make this point another way, if you saved $1,354 per month from 22 until 70 and earned a 10% return every year, you would have accumulated more than $19 million. Each option has the same result, a net worth of $1 million, but you could save 95% less thanks to the benefits of compounding interest. This is a simple example of how compounding interest can help you build wealth faster and easier.
I'm confident we could all find a way to come up with $2.50 per day to become a millionaire. Option 2: However, with the help of compounding interest, if you were able to earn a 10% return every year (after taxes and fees), you would need to save just $71 per month.That will be tough or impossible for most people. Option 1: Starting at 22 and earning 1% (after any taxes and fees), you would need to save $1,354 per month to become a millionaire.
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Example: How to Accumulate $1 millionĬASE STUDY 1*: Let's say you wanted to accumulate $1 million by the time you were 70. Even if you were to win the lottery or receive a large inheritance, it would be hard to make that money last without investing it. Without some investing, you will have virtually no chance of accumulating a million-dollar net worth.