Do you want to retire with enough money to make it in retirement? How about retiring with more than enough money to retire comfortably? Today’s millennial generation is not saving a dime. It is the only generation in history to actually have negative savings, which means not only do most millennials not have any money saved, they also carry a high debt load and owe money. Today’s millennials live beyond their means, do not know how to save, and have no firm reality based retirement plans. If you want to retire rich, start by learning and practicing these financial tactics.
The key to wealth generation is setting up a budget and sticking to it. Many of today’s generation see the word budget as a dirty word, but it is the corner stone of good financial habits. In order to build wealth, you must live below your means, not above it, and this can only be done with the help of a budget. Your budget should have room for at least 20 percent of your income going towards savings.
Rainy day and Emergency Fund
Many people end up in debt due to never planning for emergencies. Most loans today can be attributed to either emergencies, or for goods or services that could have been saved up for. When you go for a loan you are throwing away hundreds if not thousands of dollars away in interest. When you borrow you are making someone else wealthy due to being unable or unwilling to save up money. In life it is not a matter of if you will ever need money for an emergency, but rather a matter of when, so prepare yourself now by starting an emergency fund.
Automatic Savings Accounts
You should set up an automatic savings account so that you save money no matter what happens. All to often we intend to save money, but human nature gets the best of us, and before we know it our paycheck is gone. To prevent this, set up an automatic savings account. You are also taking advantage of compound interest when you do this, every rich person knows that money makes money. While the interest rate on savings accounts today is not that great, it is better than negative interest!
This is one of the ultimate retirement vehicles here. A Roth IRA allows you to build wealth for retirement that when you retire is tax free, since you pay the taxes on it beforehand. At age 59 ½ you can withdraw your Roth IRA money without penalty, and if you follow the advice in this article you could retire young at age 59 ½! There is no call to have to retire at age 65, those who have the dedication can find the means to retire early and retire very comfortably.
Live below your means
If you want to build wealth, you need to learn the habit of living below your means. That means saving money anywhere possible. It means not rushing out to buy the latest i-Phone when it hits the market, or buying slick ultra high priced sports cars. Learning how to not spend money while learning how to make your money last longer is vital towards wealth building.
All wealthy people have learned one key train of thought, to make their money work for them. It is not enough to merely save money, you also need to invest money. Yes there is always some risk with investment, which is why you should seek the help of a financial planner to assist you. You can mitigate your risk by choosing S&P 500 index funds, which have a wide variety of companies. Index funds are also light on fees, so you see a higher rate of true return.
If you practice the above advice you will be able to meet every financial obstacle head on, and retire very comfortably. Stay tuned to the editorial team from Short Term Signature Loans, the #1 finance site for emergency loans, cash savings tips credit and finance news in 2015!