Save Big And Live Large
_When planning for retirement, the earlier you start saving, the better. After all, most people graduate high school, finish up college or university and don’t begin their professional career until their mid-twenties.
With so many available post graduate degrees and potential internships, it’s possible to even put off a career launch until the thirties. If you wait until then to start saving for retirement, you’re missing out on the miracle of compound interest.
In order to set up a nice retirement fund regardless of when you start to work, planning ahead is critical. Even in your teens and early twenties, there are several things you can do to get yourself on the road to self sufficiency. You just have to educate yourself and follow the basics.
Per usual, getting out or staying out of debt is the key to your future success. Learning to live within your means at an early age by saying no to building debt on your credit cards is the only way to keep a leg up financially. Once you understand this, it’s simple to create a financial plan that will get you ahead.
When creating a financial plan for retirement, map out the details. Determine how young you would like to be to retire and how much money you would have to save at what interest rate in order to get there. Odds are, the numbers may shock you and tempt you to jump into some sketchy, high risk money making schemes. Don’t fall for it - if you simply save now, you will live large later due to the miracle of compound interest.
The best way to understand compound interest is to understand the idea behind it. Basically, you are investing cash now that draws interest. That interest is added to the cash you have in the bank, plus any additional cash you add this year. Next year, you’ll have interest on the interest you made last year, as well as any cash you add. The following year, you’ll have interest on your interest on your interest, plus…
Do you see how this cycle can work in your favor when we’re talking long term? In the beginning, the interest is typically low and unimpressive but if you peek ahead thirty years from now, the amount of money that seems to magically appear can be jaw dropping. The trick is simply making that commitment to save.
To many people, saving for retirement is a dull concept. The best way to get yourself started is to set up a direct deposit straight from your paycheck and into your retirement fund. That way, it was like you never had the money to begin with. It’s a lot harder to squirrel away cash for so many years from now if you see it in your bank account today. Avoid the temptation, go direct deposit and get on the road to retirement young.
As your life and career progresses, always take time to review your financial plan. Remember, raises and unexpected bonuses are great opportunities to pay out even more to your retirement account but the important thing is starting your account young, no matter how much money you’re adding to it. When saving for retirement, it’s the long term commitment that will help you retire rich.
With so many available post graduate degrees and potential internships, it’s possible to even put off a career launch until the thirties. If you wait until then to start saving for retirement, you’re missing out on the miracle of compound interest.
In order to set up a nice retirement fund regardless of when you start to work, planning ahead is critical. Even in your teens and early twenties, there are several things you can do to get yourself on the road to self sufficiency. You just have to educate yourself and follow the basics.
Per usual, getting out or staying out of debt is the key to your future success. Learning to live within your means at an early age by saying no to building debt on your credit cards is the only way to keep a leg up financially. Once you understand this, it’s simple to create a financial plan that will get you ahead.
When creating a financial plan for retirement, map out the details. Determine how young you would like to be to retire and how much money you would have to save at what interest rate in order to get there. Odds are, the numbers may shock you and tempt you to jump into some sketchy, high risk money making schemes. Don’t fall for it - if you simply save now, you will live large later due to the miracle of compound interest.
The best way to understand compound interest is to understand the idea behind it. Basically, you are investing cash now that draws interest. That interest is added to the cash you have in the bank, plus any additional cash you add this year. Next year, you’ll have interest on the interest you made last year, as well as any cash you add. The following year, you’ll have interest on your interest on your interest, plus…
Do you see how this cycle can work in your favor when we’re talking long term? In the beginning, the interest is typically low and unimpressive but if you peek ahead thirty years from now, the amount of money that seems to magically appear can be jaw dropping. The trick is simply making that commitment to save.
To many people, saving for retirement is a dull concept. The best way to get yourself started is to set up a direct deposit straight from your paycheck and into your retirement fund. That way, it was like you never had the money to begin with. It’s a lot harder to squirrel away cash for so many years from now if you see it in your bank account today. Avoid the temptation, go direct deposit and get on the road to retirement young.
As your life and career progresses, always take time to review your financial plan. Remember, raises and unexpected bonuses are great opportunities to pay out even more to your retirement account but the important thing is starting your account young, no matter how much money you’re adding to it. When saving for retirement, it’s the long term commitment that will help you retire rich.