Can you pass a candy or soda machine and not purchase something? Can you go to the mall with your friends and not come home with something? If your friends invite you to the movies, can you say no? Do you spend your entire paycheck? Do you have long-term goals such as buying a car, going to college or buying a home? The fundamental building block to personal wealth is learning to live below your means. In other words, SAVING your money! That’s it! That’s the big secret to becoming prosperous. Granted, there’s the question of what to do with the money once you have it saved; but if you cannot adjust your living expenses so that you create and maintain a regular saving plan, there’s no need discussing the rest. I am sure that you will find the appropriate investment such as a home or retirement.
What if, every day you put your spare change in a piggy bank, jar or box? How much do you think you would have at the end of a month? If you invested your money earning an average of 7%, you could reach your goal. You could earn $5,394.00 in ten (10) years saving $1.00 per day and you only invested $3, 650.00. Long term save $10 per day and by the time you retire (50 years) you earned $1,587.699.00 and only invested $182, 000.00. For the cost of a pack of cigarettes or the price of going out for lunch, you could save over a million dollars! New cars cost over $20,000 and houses/condos cost more than $300,000. But once you get in the habit of saving, you can increase your savings to meet your long-term goal.
A good rule of thumb is save ten (10) percent of your earnings. When do you want to own a home? Setting a reasonable time frame such as by the age of 30 is the first step. How much do you think you will need to buy your first home? If you put 10% as a down payment, you would need at least $30,000. If you invest as little as $20 per week for twelve (12) years and earn as little as 7% per year, you will reach your goal of $19,906.00. You only need to add $100 and you met your goal. Congratulations.
There are many saving techniques that can make it easier to achieve your goals. One of the best techniques is setting up a payroll deduction from your paycheck into your savings account. What you don’t see, you don’t spend! As your savings accumulate, you can automatically invest your money. You are now on the road to meeting your goals.
Photo by: Amagill
Please make sure to subscribe to our RSS feed to get the latest updates!