Tips On Retiring Rich On An Average Income
Updated: Mar 19, 2020
The following is an article “Tips On Retiring Rich On An Average Income” by Marc Primo.
Self-made millionaires like Tony Robbins are living proof that you don’t need to have an astronomical salary to be able to retire wealthy. In fact, he believes that anybody can become rich; the challenge really is the ability to stay rich.
The following practical tips apply to anybody regardless of how much they make and can help ensure they retire with enough money in the bank than they ever dreamed:
Save, save, save — Many successful millionaires have the same philosophy: it’s not how much you make, but how much you save. Whether you earn six figures a month or six dollars a day, he who does not save will find his well running dry sooner than he who saves some of his earnings every pay day. It does not matter how much you set aside; even saving the smallest amount of your earnings is better than not saving at all. Over time, these savings will grow with interest when untouched and before you know it, will have multiplied ten-fold where you can then use it for other investments.
Invest in investments — Whenever you find yourself with additional disposable income, why not consider investing it in stocks or high interest time deposit accounts? While the temptation to spend extra cash on luxuries like vacations and material things will always be there, exercising discipline and self-control will go a long way and pay higher dividends in the long run when invested wisely. This is often the crossroads where those who stay rich choose to invest, and those who lose it all choose the path of instant gratification by splurging on unnecessary things that amount to nothing in the long run. Case in point, the self-control of educated and successful entrepreneurs vis-a-vis the rags to riches to rags stories of athletes or lottery winners who get rich quick but are not well-versed in wealth management and lose it all in a heartbeat.
Differentiate “wants” from “needs” — So you’ve earned a ton of money that you don’t know what to do with. The most basic thing you need to understand is the difference between your wants and your needs. It’s easy to fall into the trap of classifying the latest iPhone as a need, when a smartphone that will set you back half the price will serve the exact same purpose. Knowing your earning capacity, determine what your needs are first, which are typically food, shelter, and clothing. Then depending on your budget, set parameters for each need. For example, caviar might be food, but not a need; or an Armani suit might be clothing, but clearly just a want. Once you’ve established your priorities, you’ll be able to channel your funds accordingly and keep unnecessary spending to a minimum.