Let's NOT Complicate Things
Look, no matter how complicated the ivory towers of finance make their investment products, the key to a comfortable retirement boils down to one simple principle:
Unfortunately, while most people know exactly how much they earn, they have no clue as to how much they are spending.
Between buying on credit and being totally unaware of the opportunity cost of their personal belongings (nearly everything you own is wearing out or becoming obsolete as we speak), most people end up retiring to a life of trying to pay their bills with half the income they had before they retired.
The real shame of it all is that their banker would have gladly funded a large portion of their retirement for them.
Make Your Banker Fund Your Retirement Dreams!
When you deposit an amount of money to a bank, the bank in turn loans that money back out to a borrower. Of course, the borrower pays a monthly finance charge on the outstanding balance until they pay off the loan.
The cool thing is, your bank gives you a cut of the finance charge proceeds. But better yet, each time one borrower pays the bank back, the bank borrows it out again, and the process starts all over.
I know, nothing new there. But the point is, the longer you leave your deposit in the bank, the more times your money is borrowed out and paid back, and the more the bank pays you for that same one-time deposit.
A Small Deposit Now Can Rival Twice the Future Deposit
Using the Saving Account Interest Calculator we can see that if you are age 44 and the bank pays you 4% on money you put into, say a Roth IRA, depositing $200 now will be worth the same as a $445 deposit that you make 20-years from now (at age 64).
In other words, you only put $200 toward your retirement, but your banker added another $245 -- without you having to do any additional work!
But, the longer you wait to deposit the $200 into your retirement savings account, the less the bank is going to contribute. In our example, waiting only one month will save the banker $2! Is it your goal to help the bank to save money?
Don't let your banker off the hook!. Use the Retirement Saving Calculator on this page now to set a savings goal and then use the Savings Goal Deposit Calculator to calculate how much you need to set aside each month to meet your goal. Then start saving today!
My 5 Steps to a
1. Discover a work you would never dream of retiring from unless your health forced you to.
2. Downsize your current lifestyle (that's what businesses do, and your life IS a business).
3. Stop borrowing from your future income to subsidize today's wants.
4. Pay off all of your current debts as quickly as possible -- saving you (tens of) thousands of dollars in interest charges (tax-free returns).
5. Once debt-free, divert all or part of your freed-up debt payments into a Roth IRA.