Do you want to become rich? Do This 1 Thing – The Crazy Motley

Here are two quotes to ponder: Poet T.S. Eliot jokes: "Sometimes things become possible if you want them bad enough." And writer Lev Grossman noted: "If there is one lesson life teaches us, it is that wanting does not make it so."

Many of us wish to be rich. But many of us will not get rich either – although we could if we just do this thing: make it a goal that we pursue seriously.

Are you interested in getting rich? And if you are, do you have a plan on which you act? There is a good chance you will not do it. According to the 2018 Retirement Confidence Survey, about 4 in 10 workers have taken the time to determine how much money they will need to live comfortably in retirement.

According to the 2017 Pension Survey, a total of 24% of workers report saving less than $ 1,000 for retirement, while 55% have less than $ 50,000. Obviously, many millions of Americans – most of whom would like to be rich – are not on the road to wealth.

It does not have to be you, though.

You can become rich – if you have a plan

If you really want to be rich, make it an official goal. Develop a plan for doing this, then work diligently to achieve it. he can to be finished. The table below shows how powerful you can create wealth over time.

Source: Calculations by author.

Three key factors determine how much you can raise:

• How much you can save and invest each year: Obviously, the more you can wear regularly, the faster you will accumulate a big nest egg. Not everyone can save $ 20,000 (or more!) A year, but if you think a bit more about how you could make a little more money to invest – a side concert or a reduction in some expenses – you may be able to go further than planned.
• The growth rate you expect: If you are still in your retirement years, focus your investments on the stock market, as equities tend to outperform most options over the long term, averaging 10% annual growth over several decades. Its average yield may be higher or lower than that of your The table above therefore assumes a slightly more conservative growth rate of 8%. A good way to achieve returns close to those of the stock market is to invest in one or more funds indexed in low-commission markets, such as the SPDR S & P 500 ETF (SPY), Vanguard Total Stock Market ETF (VTI), and Vanguard ETF Total World Stock (VERMONT).
• How many years your money must grow: This is also obvious. The longer your money can grow, the more it will be able to do it.

Make the most of ARIs and 401 (k) s

It makes sense to make the most of tax-efficient retirement accounts, such as ARIs and 401 (k) s. There are two main types of IRAs: the traditional IRA and the Roth IRA. With a traditional IRA, you contribute to pre – tax money, which reduces your taxable income for the year and, consequently, your taxes. (A taxable income of $ 70,000 and a $ 5,000 contribution? Your taxable income drops to $ 65,000.) Money increases in your account over time and is taxed at the rate of your regular income tax when you retire him.

With a Roth IRA, you contribute to post-tax money that does not reduce your taxable income during the contribution year. (A taxable income of $ 70,000 and a $ 5,000 contribution? Your taxable income remains $ 70,000.) But with a Roth IRA, you can withdraw your money at retirement. free of tax.

Although you can contribute only $ 6,000 to an IRA in 2019 (plus an additional $ 1,000 if you are 50 or older), you can pay a lot further in a 401 (or his cousin, the 403 (b) that many schools and other nonprofit organizations offer). For 2019, you can contribute up to $ 19,000 to a 401 (k) account, plus $ 6,000 for 50+, for a total of $ 25,000. Many employers now offer their employees traditional 401 (k) accounts and Roth versions.

Stick to your program

Once you save and invest aggressively, stick to it. Do not forget your plan, ideally by reviewing it and re-evaluating it at least every few years. You can stick to your plan a little easier by automating some of your savings and investments. Your employer may allow you to automatically send a certain amount or a portion of each paycheck to a savings account, for example.

Finally, do not let your emotions bother you. If the market collapses, remember that he has always recovered after big drops. If you get discouraged, remember that many ordinary people have built great fortunes, thanks in part to their patience, determination and perseverance.