The key to becoming a millionaire is the simple
compound interest formula and time.
For example,
Question #1
If you invest $200 a month for the next 30 years, and averaged a 15% return
a year, how much money do you think you'd end up with?
The answer is ...
Question #2
If you started putting $30 a month away, the equivalent of a dollar a day,
at age 20, and you continued until age 65, averaging 15% annual return,
how much would you end up with? The
answer is ...
This is the magic of compound interest--interest on principal and interest.
To see exactly how your money grows (Using the values from question #2 above)
To become a millionaire this is what you need to do...
- Pay yourself first.
Instead of investing what is left of your paycheck at the end of a month,
take out the money the minute you get your paycheck. Better still, have
the bank automatically take it out for you.
- Be consistant.
Invest a fixed amount at the beginning of every month. For example, $100 at
the beginning of every month. The best way is to have your investment
company automatically take out the amount from your paycheck
- Invest in mutual funds.
A regular savings account pays about 1% to 2% interest. Mutual funds
can pay as much as 20% annual interest. Unless you can take the risk, do not invest in common stocks.
Back