Have you ever walked into a Wal-Mart or other big box store and been greeted by an older person who probably should have retired a decade ago? We all have at some time or another, and most of us think that when we’re that age, we want to be taking vacations and spoiling our grand kids, not handing people shopping carts! Heck, none of us really want- to have to work during retirement. It’s okay if you choose to work during retirement so that you have a reason to get up in the morning, but it should be your choice to do so. Don’t worry, you can retire a millionaire, and all you need is $100 a month.
It’s the power of compound interest working in your favor. A little bit of money invested well over a long period of time can equate to a lot of money! It’s really a simple concept, but so many people fail to make use of the amazing power of compound interest. You can be very wealthy at retirement if you just put a relatively small amount of money away for retirement in a solid investment for a long period of time.
Let’s take a look at the example that I mentioned in the title. If you’re under the age of 30, you can retire with a million dollars by age 65 by putting away $100 a month. You’ll need to put it in a solid mutual fund that has averaged 15% over a long period of time, but they are out there, and you can find them. You just have to do the research and find a good mutual fund to invest with. If you’re really young, say age 20, you would only need to deposit $20 a month into a good mutual fund to be a millionaire upon retirement.
You will also want to put this money in some sort of tax sheltered account, such as a 401K plan or a Roth IRA so that you don’t have to pay taxes on any of the money your mutual fund makes. You’ll have to go find a savings calculator to figure out how much a month you need to put away to be a millionaire at retirement, but chances are it’s a lot less money than you might think.
Make use of the power of compound interest in your financial life rather than letting the bank use compound interest against you through credit cards, mortgages and automobile loans. Compound interest is an amazing tool if you let it work for you and not somebody else.
If you put away just a little bit of money each month and invest it well, it’s difficult to not become a millionaire when you retire. If $100 a month can make you a millionaire by starting to invest at age 30, imagine if you put away 15% or 20% of your income away for retirement. When retirement occurs, you could do just about anything that you ever wanted.