For most of us, there are no quick and easy paths to wealth. Financial security takes time, and sometimes, it's hard to be patient. But personal finance blogger J. Money offers an inspiring reminder: focusing on even "one financial thing" can make a huge difference over time.
In a post on his blog, Budgets Are Sexy, J. Money runs down some simple ways to build wealth:
- Max out your ROTH IRA every year ($5,500)
- Max out your 401(k) every year ($17,500)
- Max out BOTH your IRA and your 401(k) every year! ($23,000)
- Pay off your entire mortgage and save the future payments
J. Money writes:
"You do *any* of those on rotation year in and year out, and I guarantee you'll reach financial freedom in 20-30-40 years from now. All depending on your expenses, and lifestyle, yada yada… (And if you're not in a position to invest large amount of money every month/year, at least start with SOMETHING. Even just $100 or $200 a month can do enough to snowball you towards your goals faster!)"
These are the basics of personal finance, and they're simple, but not easy. It takes consistent work. And, of course, not everyone can afford to take on these habits. But neglect to try and you miss out on earnings—and, eventually, financial independence.
Money offers a personal example. He increased his net worth significantly in six years by simply focusing on maxing out his retirement accounts.
"...the single driving force to growing our worth from $58,769.65 to $447,240.46 in 6 years was simply following bullet point #2 up there, and then later on #3: Maxing out both my retirement accounts. That's it."
It's an inspiring reminder that good financial habits eventually pay off. Check out the rest of the post.
The Power of Doing Just One Thing | Budgets Are Sexy
Photo by OTA Photos.
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