oldguy
Senior Member
Cash: $ 751.85
Posts: 3656
Joined: 21 May 2006
Location: arizona |
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quote: same track as many of your college classmates. This is where you have a couple of options. You can continue living your life following the Joneses, or you can take hold of your financials and achieve personal success while living a life free of monetary burdens.
I've read a few of your 'tips to financial independence' - ie, saving $700/y on coffee, moving savings from a penny-return to a 1% return, etc. But as an elder, who has already been there, done that, I can tell you that you are incorrect. To build wealth (or save money) you need to focus on significant items. One way to see this clearly is to do a Pareto Analysis of your expenses, that will show the difference between your "significant few and your insignificant many". A $700/y coffee bill and changing from a $10/y return to a $100/y return on a $10k fund are both insignificant.
To achieve personal success, it is key to learn where money comes from - eg, a 1% savings account is actually a loss (inflation). But an 11%/y index fund outpaces inflation, longterm. Your $10,000 fund would double about every 6.5 yrs (Rule of 72). Ie, $20k in 6.5y, $40k in 13y, $80k in 19.5y, $160k in 26y, and so on. And if you put several $10k blocks together, it quickly grows to millions. But that isn't done by saving $700/y on coffee, it is done by controlling the Big 2, ie, Cars & Shelter.
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