Page 35 - Book2E

feel comfortable with. The Armchair Millionaire (www.armchairmil- lionare.com) suggests the following ways to help you save:
Save automatically . The easiest way to save automatically is to set up an automatic investment plan with your broker or mutual fund company—or wherever you decide to save and invest your money. This will enable a set amount of money to be automatically withdrawn from your checking account each month and automatically placed into the investment of your choice. This service is nearly always free. The best thing about it is that it’s painless—the money is gone before you know it, so you never really miss it.
Save enough . To make a real difference in your long-term financial health, you need to sock away a substantial part of your income—at least 10% of your take-home pay. If you absolutely can’t do 10% right now, start at 3% or 5%, but commit to increasing it as soon as you can. If you think this is impossible, just
think back to a time (it probably wasn’t too long ago) when you earned less than now. You still found a way to make ends meet, didn’t you?
Do the math . Little will do more to moti-
vate you than knowing how much your
“pay yourself first” money can grow over
time. Let’s assume that you bring home
$3500 a month and that you decide to save 10%, or $350 a month, over the next 20 years. Assuming an annual growth rate of 9%—his- torically, an extremely realistic number—your $84,000 total invest- ment would grow to over $235,000 in 20 years.
START NOW . Without a doubt, saving that first month’s amount can be difficult. But starting is the only hard part—once you get started, it’s all downhill from there. You’ll not only get used to saving money, you may even forget that it’s happening.
Saving Makes Good Cents 27
A bank is a place that will lend you money if you can prove that you don’t need it.
—Bob Hope