Do you know:
- how much of your money do you get to keep each month?
- where your money is going?
- what amount of your paycheck you should devote toward a car or housing each month?
- why you work?
If your goal is to have success with your money, and maybe one day own a business or retire without money worries, you should be able to answer each of these questions.
Let’s get some statistics out of the way:
- 2/3 of Americans save a little or nothing at all.
- The median retirement savings for all families in the U.S. is just $5,000.
- Only 9 out of 100 Americans are expected to be financially successful at age 67.
Our society is saving at record lows. And personal debt is increasing.
Now that we’ve gotten the stats out of the way, let’s talk about how to succeed.
When I first got out of college and got my first job, almost forty years ago I thought I just gained my freedom. After twelve years of schooling I could now do what I wanted. After all now I’m a full fledge adult, with money. I could get my own apartment, car or other things I’ve dreamt of. I’d start saving later. Just let me live right now. Boy was I wrong! I went out and brought the things I wanted.
Then came the family and with it all the responsibilities and expenses that come with it.
Trying to control debt and making sure my family was happy and had what they wanted and needed.
Money was always tight and a problem. My ex-wife and I sure fought about it enough times. Note I said ex-wife. Anyway, we could never seem to save enough because there was always an emergency.
I finally realized I had to save and put my money to work for me. I also realized like many of us I’ve been taught the harder you work the more money you’ll make. In other words, time = money. I’ve discovered this isn’t true in reality. If it were, why do the rich continue to get richer? Sitting courtside at a basketball game or on their yacht? Their money grows exponentially. Yet they’re not putting in more hours than you or I. Is their time more valuable while their conducting business on the golf course?
I’ve discovered it is actually the inverse. Money = Less time Spent. Why? When you put your money to work through savings, it replaces the time you spend working. Money makes money. Money becomes the ‘MoneyWorker’! Anyone who earns money has a MoneyWorker if they choose to use it. Money should be your worker generating income for you. Let me show how:
- A 23 year old earning $50,000 a year and saving $300* each month (10% of $3,000 take home pay) could have $696,000 at age 65. If you subtracted $50,000 a year to from these retirement funds to live on each year, you’d have almost 14 years of income in which to live. Not to mention your untouched money would still be earning interest.
- Every $50,000 you have in savings working for you = another year of freedom!
- Every dollar saved (the money-worker) invested in you today will more than double in twenty years. Thirty years- triple, forty years- over five-fold*.
The MoneyWorker brings freedom. Not just financial freedom but freedom from worry. Money related concerns and worries become smaller. Emergencies dissipate. You start loving the MoneyWorker because it allows you leisure time. It comes to work every day, and doesn’t mind you checking/ counting on it. And you can tweak its performance as you like.
To put the MoneyWorker to work, the key is to start allocating your paycheck. Once you’ve started and been doing it for a while, your habits will change because of the growth in your savings. Businesses do this to dedicate revenue to specific expenditures and to fund growth.
The key to your freedom is the amount you save!
* Assumes an average 7% annual return on 70% of dollars saved and 1% average annual return on 30% of remaining dollars saved.