The single most important tip in personal finance and investing is to Pay Yourself First.
In order to become financially independent it is necessary that you have enough money. In order to have enough money it is necessary that you invest enough. In order to invest enough it is necessary that you save enough. To save enough make sure that you pay yourself first. Make sure that you save certain amount from you income.
What is that certain amount? Is it 5% of you income or 15%? Is it $250/month or $500/month? The short answer is higher the better. Higher the amount is, faster financial independence is.
For example, Rob and Bob started working at the age of 25. Rob decided to save $500/month and Bob decided to save $550/month. At the age of 65, at 8% rate of annual return, Rob will have $1,635,511.48 and Bob will have $1,799,062.62. Bob will have $163,551.14 more by saving $50/month more! That’s the beauty of compound interest.
You will think that you are just 25 and there won’t be much difference if I save after a while. Earlier the better.
For example, Rob and Bob started working at the age of 25. Both want to save $500/month. Bob decided to save at the age of 25, but Rob decided to wait for a while and started contributing at the age of 35. Who will have more money at the age of 65? You are right. Bob will have more money. But how much more? Bob will have $1,635,511.48 and Rob will have $715,040.62, that is the difference of $920,470.86. That’s right. By start saving 10 years earlier Bob will have a little under a million more than Rob! That’s the beauty of compound interest
For more information, go to www.themoney101.com
In order to become financially independent it is necessary that you have enough money. In order to have enough money it is necessary that you invest enough. In order to invest enough it is necessary that you save enough. To save enough make sure that you pay yourself first. Make sure that you save certain amount from you income.
What is that certain amount? Is it 5% of you income or 15%? Is it $250/month or $500/month? The short answer is higher the better. Higher the amount is, faster financial independence is.
For example, Rob and Bob started working at the age of 25. Rob decided to save $500/month and Bob decided to save $550/month. At the age of 65, at 8% rate of annual return, Rob will have $1,635,511.48 and Bob will have $1,799,062.62. Bob will have $163,551.14 more by saving $50/month more! That’s the beauty of compound interest.
You will think that you are just 25 and there won’t be much difference if I save after a while. Earlier the better.
For example, Rob and Bob started working at the age of 25. Both want to save $500/month. Bob decided to save at the age of 25, but Rob decided to wait for a while and started contributing at the age of 35. Who will have more money at the age of 65? You are right. Bob will have more money. But how much more? Bob will have $1,635,511.48 and Rob will have $715,040.62, that is the difference of $920,470.86. That’s right. By start saving 10 years earlier Bob will have a little under a million more than Rob! That’s the beauty of compound interest
For more information, go to www.themoney101.com
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