Growing our savings can sometimes feel like an impossible mission!
However, it’s good to remember, Rome wasn’t built in one day 😉
So we have gathered some tips to help you get started and prepare for your future.
The Latte Factor
The Latte Factor (David Bach‘s Automatic Millionaire book) is the concept that tiny amounts of money could add up to huge amounts of savings over time. True to the name, the classic example is a $US5 cup of coffee each morning.
As David explains, if that same $US5 was instead invested and earned the stock market’s historical return of 7% per year, our luxury coffee drinker would have an extra $US1,953 after just one year.
And after 40 years?
Just from a few coffees!
The 30 for 30 Rule
Sean found that one of the best ways to start building wealth is to save small amounts of money every day – he started by saving $US5 a day and is now saving about $US100 a day.
His calculations reveal that if you save and invest $US30 a day, earning a 7% rate of return, you can be a millionaire in 30 years.
$US30 a day is as simple as passing on a dinner out. Driving a cheaper car, or even working a couple extra hours at a low-paying job.
That’s the great part about The Latte Factor and The 30 for 30 Rule: It’s a starting point.
Once you open your eyes to the incredible compounding effect of your money, you’ll find yourself looking to up your savings wherever you can.
Read more: How to Budget in Simple Steps
Money doesn’t have to be complicated
The pyramids weren’t built by Ancient Aliens, and millionaires don’t have to get lucky.
A little bit of effort, over and over again, is all it takes to build serious wealth.
“You don’t set out to build a wall. You don’t say ‘I’m going to build the biggest, baddest, greatest wall that’s ever been built.’ You don’t start there. You say, ‘I’m going to lay this brick as perfectly as a brick can be laid.’ You do that every single day. And soon you have a wall.” – Will Smith