Challenge Yourself to Retire a Millionaire

Out of over 320 million Americas, around 35% have no money set aside for retirement.

Meaning they’ll have to work long after the usual retirement age of 65. And sometimes, unfortunately, until they kick the bucket.

There will be no retirement for them.

And out of the same 320 million population, around 50% have reported that they will struggle to support themselves financially after they hit retirement age.

All because of poor planning or just a basic lack of knowledge on the subject. Which is why I want to challenge yourself to retire as a millionaire by doing the things below.

Be a Leader and Go Against The Grain

Millionaires don’t become millionaires by listening to the mainstream media and the people around them who don’t know how to make money.

Therefore, people who want to be millionaires shouldn’t listen to people who don’t have the financial knowledge to do so themselves.

And some of the biggest things you should do when saving and investing your money is:

  1. Practice delayed gratification
  2. Ignore the headlines
  3. And start a side hustle (or even a small business)

By delaying the gratification of spending your money now, you are going to have ten-fold in the future if you hold onto it for long enough. And challenge yourself to not let the headlines of a coming recession, depression, or company news scare you into taking your money out.

Taking your money out of investment and retirement accounts makes you lose your time value of money. And you are more likely to spend that money once it’s taken out and back in your hands.

Another way to help put aside money is to either start a small business you can manage on the side of your normal work life or start a side hustle.

Plus, if you’re the type who likes to read, write, or translate things, there are an abundant amount of opportunities waiting online for you.

Invest in a Roth IRA

A Roth IRA is an individual retirement account.

It’s a tax-advantaged account meaning when you take money out of this account, you will not be taxed on that money.

Once you put money in, you have to wait five years until you can withdraw it tax-free and without penalties. And at the age of 59 ½, you’re allowed to withdraw both your earnings and contributions without paying taxes or penalties.

The maximum amount you can put into a Roth IRA every year as of 2021 is $6,000 (or $7,000 for those 50 years or older). And if you think about that, $6,000 isn’t a huge amount to put away every year.

That’s $500 a month.

Or $115 a week, which is $16 a day. So out of a typical 8-hour workday, that’s only $2 per hour that can help you become a millionaire by the time you retire. Challenge yourself to put in a weekly amount for your future.

Because a key part of having a lot of money set aside when you retire is time. Time is going to be your best friend in any situation when it comes to investing your money.

Companies like Vanguard, Charles Schwab, or Fidelity can help you get started. And opening up your own Roth IRA and investing early and often can make you a millionaire by the time you’re ready to relax for the rest of your life.

Invest in The S&P 500 ETF

Time and data have shown that if you were to take any 40-year period of time in the stock market’s history, you would gain about a 7% return.

That being said, the S&P 500 index (SPDR) as of 2020 made almost a 16% return. You can gain returns like these by purchasing an S&P 500 index fund in your Roth IRA account.

All you would have to do is set up the account and put in some initial information and just like that you’re an investor. You can also invest in the S&P 500 through your employer’s 401(k) plan.

And the best advice I can give you when it comes to investing is to leave it alone once you have put your money in. If you check the price of your investment portfolio daily, you might think there is something wrong.

That’s because the stock market price always goes up and down, all day every day. It’s only in the long run, you start to see the upward trend.

And throughout history, over time the market has always gone up.

Invest in Tech Stocks

Technology has been advancing since humans started to develop sophisticated brains, and technology will never stop improving.

That being said, most big-name tech stocks like Apple (AAPL), Tesla (TSLA), Microsoft (MSFT), and Amazon (AMZN) have had impressive returns over the past five years. And while you can buy and hold them individually I prefer index funds like VGT and QQQM that track a large number of tech stocks.

With some of the biggest market caps in the industry, these companies are going nowhere, and to not invest in them would be foolish. Holding onto index funds on a long-term horizon will reward you greatly.

Challenge yourself to hold stocks and other investments long-term.

Challenege Yourself to Save Money Early

It might seem redundant to keep reiterating the point, but the earlier you start saving for retirement, the more money you will have in the long run!

The time value of money has been coined as the 8th wonder of the world.

And there’s a simple reason for that – the more time your money sits, the more it makes in compound interest.

There are also ways for you to save your money other than a Roth IRA. They include your 401(k) and if you have access to one a 403(b) plan. If your employer offers a 403(b) plan, max out your contributions.

And usually, your employer has some sort of matching program for these accounts. Like 3-6% of whatever you accomplish yearly.

How Much Should I Be Saving For Retirement

You might be asking yourself, how much should I even save to retire a millionaire by age 65? Well…

That number will be different for everyone.

We all have different expectations and lifestyles. But luckily, I’ve done some general math for you so you don’t have to!

If you’re in your 20s and assume a 7% return, you should save around $350 per month. And, if you are in your 30s, assuming a 7% return, you should be saving around $690 per month.

If you’re in your 40s, assuming a 7% return, you should save around $1,400 a month. And if you are in your 50s, assuming a 7% return, you should be saving around $3,300 a month.

But challenge yourself to save more and as much as possible early on.

Closing Thoughts

If you want to retire a millionaire, you need 3 things on your side:

  1. Time
  2. A High Savings Rate
  3. Good Investments.

These 3 things will get you to your goal.

And they’ll guarantee you’re not broke when you’re ready to retire. You don’t need to be a finance professor in life to have money and enjoy your retirement.

Just knowing and doing these 3 things will set you up. So challenge yourself to retire a millionaire by spending less money and investing early and often.

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