Step 4: Use Raises to Increase Your Contribution Rate
The difference between a 1% and 7% 401(k) contribution rate from age 25 to 65: over $1.1 million (assuming 8% ann. growth rate and $50k starting salary w/ 3% ann. wage increases).
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The difference between a 1% and 7% 401(k) contribution rate from age 25 to 65: over $1.1 million (assuming 8% ann. growth rate and $50k starting salary w/ 3% ann. wage increases).
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Step 5: Gain the Roth IRA Advantage
Grows tax-free, withdrawals are tax-free, and no required minimum distributions. Advantage over taxable account is enormous.
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Grows tax-free, withdrawals are tax-free, and no required minimum distributions. Advantage over taxable account is enormous.
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Step 6: Pay Down High Interest Rate Debt First
Making the minimum payment on $10k in credit card debt would cost you over $16k in interest before the balance is paid off.
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Making the minimum payment on $10k in credit card debt would cost you over $16k in interest before the balance is paid off.
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Step 7: Invest Found Money
Tax refunds, gifts, bonuses. etc. Investing a small amount of "found money" each year can generate huge long-term rewards.
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Tax refunds, gifts, bonuses. etc. Investing a small amount of "found money" each year can generate huge long-term rewards.
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Step 9: Favor Stocks Over Bonds and Cash
If you're a long-term investor, stocks will likely build more wealth than bonds/cash, doubling your money in a shorter period of time (7.5 years on average vs. 15.7 years for bonds & 21.8 years for cash).
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If you're a long-term investor, stocks will likely build more wealth than bonds/cash, doubling your money in a shorter period of time (7.5 years on average vs. 15.7 years for bonds & 21.8 years for cash).
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Step 10: Try to Live a Healthy Lifestyle
Healthy people have more wealth and earn more money...
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Healthy people have more wealth and earn more money...
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