“Someday I will Syndrome”

Do you have the “Someday I will” Syndrome? As in, someday….. I will save tor my retirement. If you’re in your 20’s and reading this post, you may think: retirement? I’m too young to think about that. Well, you have the “someday I will” syndrome just like everyone else.

Let’s say I met you when you were 18 years old, and I asked you to put aside $50 / month (either from your summer job, or parents), most likely you would never agree to this, because at 18, you’re way too busy to figure out your dating life, and savings is the last thing on your mind. Let’s say you are in your mid 20’s now, you’ve got your first office job and moved into your own apartment. I’m asking you to set aside $50 / month towards retirement, but now you’ve got bills to pay, after-work parties to go to, and you’re too busy having an awesome life style. So you wait. Now you’re In your 30’s and you have a child, and perhaps even a mortgage to pay, so you put it off some more. Before you know it, you’re in your 40’s and for the first time, you begin to have thoughts about putting money away for retirement. Let’s take a look at just how much you could have accumulated for your retirement had you started at 18, versus later in life.

The table below shows how much your investment portfolio will be worth when you retire at age 65, had you started saving at the ages below assuming a savings rate of $50 / month at 7% long-term investment return

investment portfolio size

Struggling with savings?

It’s not easy to save. If it was, everyone would be millionaires, and none of us would have the desire to buy lottery tickets. What I noticed about people is that how much they save is not related to how much they make. Someone making $100,000 is struggling to save just as someone making $50,000. Why is that? We always thought that if only we made more money, we’d be able to save more. But from what I observe with people, that’s just not the case! Why? Because the more money we make, the more places we have to spend it. So what can we do to make sure that no matter how much money you’re making today, you’ll set aside some towards savings?

Use a CASH SYSTEM. Let’s say your problem is that you spend too much. You go out too much with your friends. but you want to set aside $500 / month towards an investment for your future. So you work out that since you bring in $4,000 in net income, and you want to save $500, you can spend $3,5000 on everything else, between rent and the essentials, it’ll cost you about $2,700. Which means, you have $800 that you normally spend on entertainment (food, going out, etc.). starting next month, go to the bank and take out $800 cash and store it away in an envelope in your home, so you know for the next month you only have $800 to splurge on when it comes to entertainment expenses. You can now plan your “fun” activities according to the $800

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