There are a lot of bad things you can do with your personal finances that will impede your ability to create wealth and retire rich. Take out too many loans, max out your credit cards, not diversifying appropriately . . . the list goes on.
But there the absolute worst thing a person can do that can have the greatest impact on their future wealth is not starting soon enough.
If you do not participating in accumulating money, you could be shorting yourself millions of dollars down the road, literally. Just a few extra years of investing added to a lifetime has a huge impact.
So where do you get started? If your company offers a 401k, there’s no better option. You invest pre-tax dollars in a 401k, which means you end up paying less money in income tax. Secondly, if your not taking advantage of company matches to your contributions, you are leaving free money on the table. So try investing 10% of your income in your 401k and see how much that affects your ability to stay within your means.
If you find you could easily invest more and still have plenty of spending money left over, boost it up as much as you can. Just by maxing out your 401k you could have a million dollars accumulated in less than 15 years.
If your employer does not offer a 401k, simply set aside a fix amount of money every week or month, and deposit it in an IRA or a Roth-IRA, These retirement programs also offer great tax benefits that will allow you to keep more of your money.
Because of compound interest, the difference between someone who starts investing at 25 versus 30 is obscene. Get investing as quickly as you possibly can. If you already invest, work harder to invest more in order to reach your financial and personal goals quicker.
Ryan –
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