Contrary to popular beliefs, one doesn’t have to be expert in personal finance to get rich.
You don’t need to use economic jargon or know latest “hottest stock.” You don’t have to grow in affluent family, or you don’t even have to be a high earner.
For most people, it´s all about one thing: investing.
“On average, millionaires invest 20% of their household income each year. Their wealth isn’t measured by the amount they make each year, but by how they’ve saved and invested over time,” writes Ramit Sethi in his New York Times bestseller, “I Will Teach You To Be Rich.”
“In other words, a project manager can earn $50,000 per year and be richer than a doctor earning $250,000 per year — if the project manager has a higher net worth by saving and investing more over time.”
Sethi gives this example of the power of investing just small amount of $10 per week:
After 5 years (if average return is 8% ), you would have $3,295, and after ten years, you would have $8,136. simply setting aside 1 dollar a day.
If you save $50 a week you would have $16,473 after 5 years and $40,678 after ten years. Imagine how much cash would you accumulate setting aside a little bit more each week and doing that for several years.
The sooner you start, the sooner you get rich.
Example how you can get rich:
You don’t have to have a lot of money to invest, yet so many people fail to start managing their money because they are intimidated or don’t know how to start. Fear of losing is also a big concern: “That’s fair,” writes Sethi, “Especially after market losses during the global financial crisis, but you need to take a long-term view. Despite wild rides in the stock market, with a long term perspective, the best thing you can do is start investing early.”
Investing is not as complicated as we make it out to be. The simplest start point is to invest in your employer’s 401(k) plan. Just make sure to take advantage of your company’s 401(k) match if they offer one.
Next, also consider contributing your money towards a Roth IRA or traditional IRA, individual retirement accounts with different contribution limits and do not forget tax structures (which one you will use depends on your income). If you still have any money left and are hungry to invest more, you can take a look at low-cost index funds, recommended by Warren Buffett. Also look into the social online investment platforms like eToro.