Tip #42 – How to Make it Rich Without Playing the Lottery – There are those out there who think the only way to make a million dollars is to play the lottery. And there are those of us who know better. Many ordinary people on a simple income can accumulate one million dollars in a lifetime. But not by winning the lottery. They can accumulate one million dollars by saving it s-l-o-w-l-y. If at age 20 you put away $400 a month every month until you are 65 and you earn 6% interest on that money, you will have accumulated over $1 million dollars. Even if you can only put away $200 per month, you will still earn over half of a million dollars by age 65. However, maybe you can’t earn 6% on your money. Suppose the best you can do is 4%. Again you will still earn over half of a million dollars by the time you are 65. That is a lot of money for saving only a few hundred dollars each month.
My point is that slow and steady wins the race when it comes to money. Those who win the lottery are very few and far between. And most of those who do can’t hold onto the money that they have won. But those who get into the habit of saving a few hundred dollars each month can end up with a million dollars.
What can you do without each month to save this kind of money? Your cable? Your coffeehouse coffee? Your lottery tickets? Your dinners out?
In Real Life (IRL) – I look forward to the day that I can say I’m a millionaire. I’m not there yet. But I do have several hundreds of thousands of dollars to my name. I did not win the lottery. I did not rob a bank. I did not inherit it, and I did not receive it as a gift. I saved it month after month after month until it accumulated into a big sum. It started when I was about 22 with my first job. I put a couple hundred dollars away each month in a mutual fund. At 23, I started adding money to a 401k account with an employer match. And about that time I also started a retirement account in the form of an IRA. By the time I was 35 I had several hundred thousand dollars to my name. Just from saving a few hundred dollars per month. That is all I did. You can, too.