How To Make A Million Dollars By Age 65
We all want to be millionaires, but most of us don't know how to get there. The numbers game is easier than you might think. Start early, save often and retire in riches by following these simple steps.
Step 1: Starting At Age 25
Start early! First, save approximately $286 dollars a month. Set this money aside each month and don't touch it! Second, set up a ROTH IRA which allows you to invest your money tax free and withdraw your money tax free at retirement. Third, set up a 401(k) plan with your employer (if they offer one) and contribute to it monthly. The valuable pre-tax dollars will work to your advantage with investments made with your 401(k). Finally, pay down your debt; especially your credit card debt. Debt like this eats at your savings and will zap a lot of your income that you could be using for investing.
Step 2: Starting At Age 35
Starting late? Not to fear! You only need to save about $300 dollars a month to reach your goal at age 65. By now, you should have at least $50,000 dollars in the bank from working hard and investing. Take up to 15% of your gross income and invest it into your 401(k) or IRA. Now's a great time to be aggressive with your savings. Split your portfolio into 90% stocks and 10% bonds.
Step 3: Starting At Age 45
There's still time! Bump up your savings to about $860 dollars a month. By now you should have about $100,000 dollars saved up through stocks, bonds and IRAs. If you don't have a small nest egg, you'll need to save $1700 dollars a month to catch up financially and mathematically. Stay the coarse and don't give up. Don't let fear stop you from succeeding. You have to do SOMETHING with your money, so invest and make it work for you.
Step 4: Starting At Age 55
With no savings, you'll need to save about $5,500 dollars a month. Even with $200,000 dollars in the bank, you'll still need to be investing at least $3,000 dollars into your 401(k) or IRA. Invest aggressively into your 401(k) and IRA and shift your portfolio into 70% stocks and 30% bonds. You may want to consider postponing retirement a few years to get the most out of your investments. Keep your eyes and ears open to the next growth opportunity in your market and invest strategically for the future. Think smart, invest strong and profit in the end.