Tomorrow ill most likely write an article on how to get a million dollars in the stock market which isnt as hard as you might think if you start contributing when you are very young.
A lot of young people seem to think that a million dollars by retirement is some vast, unattainable sum that only the rich can achieve. It's important to remember that $1 now, invested properly over a course of 40+ years is likely to be worth $15+ as a conservative estimate.
If a 20 year old could invest about $60,000 present-day dollars (without any additional contributions), they're set to have a million by retirement age. For a 30 year old, present-day holdings of $130,000 (without any additional contributions) should guarantee the same.
These still seem like vast sums of money - And they are. But combining compound interest with ongoing retirement contributions should make it pretty easy for the average North American to set aside enough money for retirement if they're financially responsible.
I'm sure you'll cover it more thoroughly in your upcoming post. Looking forward to reading!
SHHHH dont spoil my upcoming article :) Seriously though, this is the point, the key is to take out just a bit automatically from each paycheck and throw it into the market and watch as it soars in value while you do nothing. Half the time its money you would blow on something stupid anyway. Simply investing small amounts of money in index funds and the whole market over time you can retire with a million dollars. Patience is key.
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I agree. Doing the same right now, investing it in a low cost index fund, now waiting to let it compound. It's so simple, but efficient. People sometimes overcomplicate investing in the stock market.
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" if they're financially responsible."
That is the key right there.
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Or have that kind of income. At 20 I had $3K and lived like a king, $60K was a pipe dream...
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I agree. I made $6-8k in a summer, and all of that went to pay tuition, housing and food costs. I saved maybe a few hundred dollars toward retirement during that time.
$60k at 20 is a pipe dream for most people. $130k at 30 is also a pipe dream for many.
But if you contribute small amounts regularly beginning fairly early on, it's very feasible to have a million dollars in 40-50 years. It's just keeping in mind that every dollar you put in during your 20's and early 30's is going to be worth 7-15 times more when you retire. Every bottle of coke you buy when you're 20 is a $15 bottle of coke. Your $20 fast food purchase ends up costing you $300.
Keeping these figures in mind, it becomes very easy to convince yourself that you can do without some things now in order to have a better retirement later. Very few people are going to invest their $60k at 20 years old, but even investing a fraction of that will help immensely later in life.
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