If you put aside $ 5,000 every year from the time you are 20, ( assuming that you earn 6% interest) that's about all you need to do, to retire a millionaire!!!!
I am certainly not making this up.
Pick up a spread sheet and input the following numbers:
Interest Rate (rate) = 6%
Number of interest earning periods [ if you start at 20, then you will have 45 years till you retire( nper)] = 45
Annual Payment [ How much you will be putting away every year (Pmt)] = $5,000
And here is the formula.
=FV (rate, nper,pmt) = FV (6%, 45,5000) = ? Check it out to see if I was telling the truth. Never under estimate the power of compound interest.
Well, if you are over 20, it is never too late to start, but also go and educate at least one 15 year-old, so he / she will have time to plan to start putting away at least $5,000 every year starting at age 20 or even sooner.
Educate your kids, Educate your friends kids. Educate anyone who you have access to. Let's make everyone a millionaire. Start early. Start now.
And believe me, one who becomes financially wise at 20, will certainly not stop at the first million. Here's to a million millionaires!
And believe me, one who becomes financially wise at 20, will certainly not stop at the first million. Here's to a million millionaires!
2 comments:
Good Article!
Though the concept of "Saving Young" is appreciated, $5000 may not be affordable from the age of 20. So they could start with whatever is possible, even $500 and then go on increasing this by mere $100 or $200 every year.
The important thing is to make early mistakes in investing in small values. I feel Early teens is when kids should know about working and creating jobs. When they make the first bit of money - they should be shown to invest. The parent should help choose investments that will be stable and those that fluctuate. The kids (teens are not kids really ?) should learn the emotions of losing and making money. Life is all about risk management. Dealing with risk through adolescence can help them become good decision makers. Each parent and kid is different.
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