12/26/2023
brokeboy_investing. In my examples, I frequently employ a 40-year time frame. I do this action because an average working career lasts for approximately 40 years, which is a very long time to illustrate the astounding power of compound growth.
Yet, I receive extremely thoughtful criticism from people who are NOT 25. And you're absolutely right! Here's an example where the person starts at age 35, has no savings, and retires seven years sooner than the average retirement age of 65.
It is all math at the end of the day. Would you want to start later or retire earlier? You will need to save more than those who plan to invest for ten more years.
However, there is still hope! Many of us, I believe, could find $500 a month someplace in our budgets. Can you downgrade some of those services, hack your house, or obtain a cheaper car? Additionally, a $500/month increase in income might be earned by bartending a few times a month, walking dogs a few times a week, or investing a raise at work rather than spending it. Consider strategies to make it happen rather than reasons why it can't if that's your goal. You are capable of this!
Investing $1,000 every month for 23 years at a 10% rate of return results in a million dollars. For the past 40 years,
This does not take inflation into account, but as people become older and inflation rises, income typically rises as well, making further investments possible. Furthermore, in my experience, new investors become much more motivated and accomplish their goals far sooner than expected once they start to see their money grow!
That's the method you use. Invest the difference when you spend less than you earn. Increase the amount of those things if you want to arrive at your destination more quickly.
As always, I'm reminding you to accumulate wealth by adhering to the two PFC guidelines: Live within your means and make frequent, early investments.
