I was checking out Dave Bach's
new article on yahoo fianance site. He was getting critcized on the yahoo finance message boards that his previous article wasn't realistic.
Can you become a millionaire by what you save?
If you don't earn alot of money, will you ever become a millionare if you are living paycheck to paycheck.
David your ideas are good in theory, but they don't have anything to do with reality," she said.
When I asked her what she meant, she explained that I talked about saving $5 to $10 a day like it was no big deal. Well, for her, she said, it was impossible, because she was living paycheck to paycheck.
We then went through her expenses for a typical day. What did we find? Well, her double non-fat latte was $3.50, non-fat muffin $1.50, juice $3.95, juice boost $.50, PowerBar $1.75 -- that was $11.20 already by 11:00 a.m., not including lunch or anything else for the rest of the day
What you do spend each day that you maybe able to cut out? For example my husband was buying a sausage sandwich and a coffee at work each day for like $5.00. I told him I could make my mom mcmuffins each day for him for probably $5.00 a week.
According to Dave if we said that $5.00 a day
$5 would become $150 a month, nearly $2,000 a year. Figuring a 10 percent return, the stock market average over the last 50 years, I asked her how much she, being 23, might save by the time she was 65? She guessed $100,000, then $200,000, then $500,000. She was shocked when I told her it was almost $1.2 million.
I don't know if 10% is realistic these days but really a hopeful return.
If you have more income for the most part you have more disposable income and can save more giving you a more realstic chance to be a millionaire.
DH and I do save for retirement. He saves in his 401k 11%. I save in a Roth IRA since I don't work a job-just my home business. I put in $300 a month into a Roth. Are we close to being millionaires-no way. Could we find more ways to save? Absolutely,we could. Do we want to? Not necessarily. There is a balance between now and in the future.
