“The rich invest their money and spend what is left; the poor spend their money and invest what is left.” ~Jim Rohn
Over the last few months, I purposely took a short break from social media to be present in the moment and spend time on those things that were most important to me. Time is often something that many of us take for granted.
We make time for so many things: friends, family, social media, and maybe even carve out a little bit of time for ourselves . . . but do you ever think about your future self?
Do you carve out ANY time for your future self?
Time is an invaluable investment.
Where do you see yourself in 5 years, 10 years, or even 25 years?
Do you ever reflect back on past experiences and say to yourself, “I wish I knew then, what I know now”?
2022 brings a new year and perhaps some old bills (paying off those gifts from the holidays). Yes, it was nice to spend time with family and friends, after a long hiatus.
As tax season approaches, you may be looking at a big tax refund or a big tax payment. Either way, you “got money on your mind”.
Meanwhile, the stock market continues its roller coaster ride, and these dips are a perfect opportunity to buy stocks on sale. Did someone say, “Sale”? I just love a good sale! Time marches on and there is no time like the present, to invest in YOU.
Ever wonder where all your money went?
It’s gone before you know it, because you didn’t make a plan. Make a plan and stick to it!
Put your money to work for you immediately!
Make it automatic. Adjust your contributions to your 401K, 403B, 457B and IRAs. Have the money taken directly out of every paycheck. Getting a tax refund? This is the perfect time to do it, so you don’t feel it.
Pay yourself first . . .
Most financial gurus suggest investing at least 15% of your income into retirement. If you are 20 or 30 something, you have time on your side. However, if you are older than 40, you might think about increasing your contributions to ensure your retirement. I invest 20-35% from every paycheck. This allows me flexibility in determining WHEN I want to retire. Is having a choice important to you?
Which funds are best?
Look for low-cost index funds that invest in the Total Stock Market or S&P 500. Each large investment firm offers their own total market index funds. You can save on transaction fees and lower expense ratios with just a little research. Many ETFs have expense ratios below 0.20%. Stay away from high cost annuities and insurance products. They are filled with fees that will eat through your earnings.
If you think you can’t possibly afford to invest that kind of money every month, you likely need a budget adjustment. Start with a small percentage and increase monthly as you become better at managing your money.
The power of compound interest . . .
Investing over time allows your money to grow. Let’s just do a few calculations. For each age, here is what you would have to invest monthly to reach $1M by age 65:
- At age 25, you would need to invest $200 monthly.
- At age 35, you would need to invest $525 monthly.
- At age 45, you would need to invest $1475 monthly.
- At age 55, you would need to invest $5250 monthly.
*This assumes you have NO retirement investments and 10% average compound interest.
What are you waiting for?
If you are in your 20s or 30s, you can invest and become a millionaire or even a multimillionaire by age 65. Are you in your 40s or older? You will need to invest more aggressively. But, even if you don’t hit the $1M mark, wouldn’t an extra $500K be nice?
Give a gift to your future self.
Your future self will thank you, for making TIME for them NOW.