Pier 3 Condo

Most people want to be rich. Even the ones who say they don’t, in reality, they do. They look at being ‘rich’ as greedy, but I’m sure they would love to live comfortably without having to worry about money.

You might agree that being rich with friends, family, and love is very important, but let’s just consider monetary riches for now. What does it take to be rich? How much money do you need to have? When can you finally consider yourself a ‘rich and wealthy’ individual?

When you were a kid, having $100 probably made you feel rich. Right now, $20,000 seems like a lot of money, but for many, this would not last entire year.

Some people will never be able to retire making retirement at age 65 with comfortable living look like riches. Many look at having $1,000,000 as being rich. You might even just look at someone driving around a Mercedes and think they’re rich, even if you don’t know how much money they really have.

First, how old are you? If you are 20 years old, you could start saving $5,000 a year in an IRA account, earn a conservative 8% annual return in the stock market, and in 40 years have over $1.3 million. If you are 20 and want to have that same amount but retire at 45 years old, several things need to change. Either you need to save more, get a higher return, or both if you can.

Another deciding factor is how much money you make and how much of it can you save. If you make over $100,000 a year that’s great, but if you can only afford to save $500 a year, your salary does you no good. You have to cut your expenses so that you can save more. If you make $40,000 a year and are able to save $5,000, you are actually much better off then the other guy.

Do you think you could never be rich? If you can’t save money, then you won’t ever be rich. If you take the time to budget and learn how to spend less, you can begin to save money and build wealth.

You also have to consider where you put this money you save. If you save $4,000 a year and hide it under your mattress, yes, it will accumulate, but very slowly. After 40 years, you’ll have $160,000. Aside from a lot of money not being safe, you’ll be giving up a lot of money by not investing it. Invest it in an 8% yielding investment every year and you’ll have about $1.1 million.

Investing your money will make it grow very large and quickly. If you won’t be retiring for more than 20 years, you should invest most of your money in the stock market. This will ensure the greatest return. As you near retirement, you can begin to invest more in bonds to help minimize risk.

If you really want to become rich, you have to put in the time and effort. Sure, a lot has to do with your age and how much you make, but you can work to make more money if necessary. With a proper plan and set goals, you can become rich.