What do you think it would take for you to save a million dollars? Do you even think it’s possible?
This CNN article goes into detail on saving your way to a million dollars.
The following line really caught my eye:
“Take your savings rate. Conventional wisdom suggests you should save a steady 10% or so a year for retirement throughout your career. Instead, says Maspeth, N.Y., financial planner Michael Terry, you’re better off adjusting that rate to fit your financial situation — pulling back to, maybe, 5%, when your kids are in college and the budget is tight, then ramping up to 10% to 15% after they graduate.”
What are the tips to saving a million dollars?
- Control cash outflow.
- Lower your operating costs.
- Boost cash inflows.
- Price yourself right.
- Make a leap.
- Get paid faster.
That sounds about right. If you increase your income over time (education, side business, promotions, etc.), decrease your spending (rent a small place, eat out less, and track your spending), and repeat for a long time, you can reach a million dollars I’m sure.
Is it easy to save a million dollars?
Not at all. The reality is that it’s going to take a long time. A very long time. You have to be consistent. You have to cut your spending and track it over the long haul. You can’t just give up or expect something to happen over night.
What about the extremes?
There are many extremes to help you boost your savings. You’ve heard of these all over the internet:
Spend every single minute on working.
We all have that friend that’s always working. They wanted to save as much money as possible. They work two jobs. They fill up every minute with work so that they can make more money.
The benefit of this is that you stay out of trouble when you’re working. You can get ahead while everyone else is spending money. The obvious downside is that you miss out on all of the fun. Who wants to do that?
Cut your expenses to the bone.
Don’t get haircuts. Never eat out. Watch every single penny.
Okay, maybe I’m using too much hyperbole. The other side to building wealth is extreme savings. I happen to think that I’m decent at saving money — in certain areas. In other fields, I spend a lot of money (eating good food for example).
This strategy is out there for you to embrace. The main benefit for me is that you have to be creative. I have used creative frugality to figure out cool ways to save money without missing out on anything.
The extremes are there if you’re willing to give them a try. I personally love life too much to work every single second or to cut my expenses to the bone. I however don’t mind taking risks. I’ve invested into condos, online world, and my education. I believe that with some calculated risks and time, you can save a ton of money.
Do you have a plan for hitting a million dollars?