If your goal is to see yourself having a comfortable life during retirement, as early as now you must already start saving. The younger you start investing for your future retirement fund, the bigger amount of cash you will be able to enjoy.
Bring Yourself To The Future
Start by examining the life you expect to have during retirement. Picture what you will be 40 to 50 years from today. Examine the lifestyle you are hoping to have and estimate how much will that cost. Then count backwards and figure out how big you need to save per day or per year just to generate the amount you have in mind.
Put Yourself Back To Reality
After you have set a money goal, realize that inflation becomes a problem. Inflation refers to the declining value of money over the years. For instance, if you have a million dollars today, such amount will be a quarter or a half lesser in the future. To illustrate, $500,000 today will be worth $350,000 after 10 years and so on. Realizing that inflation do happen will prepare you to invest bigger if you want to have a very comfortable life in the future.
Let me put it this way. If you are planning to live as a millionaire in your retirement days, then you have to save more than a million. That is because there is a high probability that a million dollars 40 years from now would just be enough to live a simple and decent life but not a luxurious life. Even experts can attest to this.
Now that you are familiar with how money behaves, start saving as much as you can. Remember that you have to save much more than your goal amount because inflation will decrease that value of money overtime. Aside from just saving money, take risks and start investing. Involve yourself in stock markets or try a new business venture. Unless you let money rotate and earn interests, then its value won’t increase. Don’t rely on traditional savings account alone. Banks barely increase the value of your deposit savings because the interest rates they offer are very minimal. You have to be proactive in dealing with your money. Don’t just be a spectator and let your money do the magic because whether you like it or not, nothing will happen.
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