Delayed Saving: Starting Late in Life to Save for Retirement

“The best time to plant an oak tree was 20 years ago … the second best time for today.”

– Chinese proverbs

Also, the best time to start investing for someone else’s retirement is with your children. Because when it comes to wanting to do his magic, time is of the essence.

But how can those who are not 40 to 50 or 50 years old still have to build a large-scale nesting nest for rent?

Well, according to economist and author David Bach, this is not the end of the story. “Even if you are just getting started,” Bach writes in his book, Start Late; Complete Rich, “You can raise a lot of money.”

And you don’t have to get mega type or mega number. In fact:

“The amount of money you earn doesn’t matter because you can make it or not.”

– David Bach, Starter Starter; Mutu Rich

However, Bach explains, “It is not so much our money, but the money we spend.” And some of the expenses can be simply adjusted by looking at what Bach calls a “Latte factor.” If, for example, you are buying a decorative coffee per day for $ 5 – if you have saved up to $ 5 per day, you can make a little money.

Here are some numbers:

If you save $ 5 a day ($ 150 / month) you will get an average 10% of your income (accumulated annually), and in 10 years, you will have $ 30,727. But in 30 years, you would earn $ 339,073.

So, if you double your savings you can save $ 10 a day ($ 300 / month) and get 10% of your average income (accumulated annually), you get 10 years, $ 61,453. But in 30 years, you have $ 678,146. Now we are talking about it (especially if you live in Canada and put that $ 3600 a year into the TFSA, at which point you can take a non-cash loan).

Let’s say you can save up to $ 20 a day ($ 600 / month) and a year with a 10% return (added per year), which in just 20 years will be $ 455,621 you. But in 30 years, you have $ 1,356,293.

However, the current stock market does not fully reflect the 10% return. If you are lucky enough to find a GIC (CD in the US) for 2% these days, it should be only 10%. That’s right. But making wealth by investing regularly and investing wisely – no matter how old we are – is not necessarily a worthwhile endeavor.

However, winning a race is slow and straightforward, even if you start that race in your forties. Based on historical data, the real estate market has given investors the right return on their investment.

According to Observations (an individual fundraiser that presents a historical perspective, emphasizes strategic planning, and uses graphs and tables to show the nature of financial activities), i between 1900 and 2012, the total return / year of the Dow Jones Industrial Average was 9.4. % also that, the fall of 1929.

In his article, The Post-Exchange Revolution for the Stock Market From 1900, Tom DeGrace looks at the return of stock markets for short periods of time. The 1990s, for example, had a decisive decade with an average annual return of 18.17%. The next decade (2000 to 2009) was not very good: 1.07%. But over the next three years (2010 to 2013), the return was 16.74%.

“The important thing is your time in the market, not your marketing time.”

– The Canadian Bankruptcy Fund

Oh, David Chilton, in his book, The Wealthy Barber Returns, argues that there will be more market turmoil in the short term. “Going forward,” writes Chilton, “we may need to work with“ dirty-out ”financial markets that are struggling with high public debt and debt, and rising inflation. economy.

I suspect he is right (but again, that also means – and probably – some very important sales opportunities in the markets). According to Stats Canada, personal debt is on the rise: It owed nearly $ 1.64 to Canadian dollars of payments made in the third quarter of 2015. In the year 1990, this figure is probably 90.

About personal debt: if a borrower holds a credit card and pays low monthly payments, collecting various items can be very difficult.

Here is a powerful example from Start Late, Finish Rich:

If you owe $ 10,000 on a credit card, you only have to pay the minimum wage (with a 19.98% interest rate), and it can take you over 37 years to get out of debt you owe $ 19,000 in bank payments.


“With a credit card we can do things that are bigger than we are,” Chilton says in The Wealthy Barber Returns. “


So what? Well, I think this finding is very powerful:

“When I was living with people who were so preoccupied with their lives, I saw three people: 1) They paid for themselves in the first place; 2) They started their youth, or not, they paid with rising savings rates; and 3) Their debt followed the management’s approach of “Owe Kore!”

– David Chilton, Returning Business Owner

For the price you pay, experts say 10% to 15% of your payment – especially if you are starting to play with savings.

And if you have a lot of debt on your credit card, David Bach says your first step is to call your credit card company and ask for a lower interest rate. And if you do not get a low interest rate, then find a lending company that offers it – transfer your balance.

Surprisingly, however, Bach does NOT require you to repay the loan first and start saving. But, he really helped you both work!

But I think if people are worried about their future finances, maybe the worst thing they can do is … not at all. It is better to plant small seeds that grow as small oak trees than to plant without seeds.

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