There are two reasons people take up blogging, first, to educate others and second to educate themselves. My reader can tell how successful I am towards first point; I can tell you that my knowledge is growing by leaps and bounds.
Since I took up writing a few months ago, I read numerous web sites and blogs; now a day I am reading books. I pick good reads from library to get self-educated on few things I am still unaware of.
Today I had an amazing discovery that I want to share with you. This post is second in my ‘How to become rich’ series after the first post “Best way to become rich is by finding time to be rich“.
What to do to become rich easily
You can be rich by just saving 1 hr of your wage every day. Spend rest of wage as per your wish. I want to thank David Bach for guiding me towards this simple calculation.
Average hourly wage in America is $18.5 and by all means I will assume your hourly wage is more than $20. For calculation sake I will assume your wage to be $20 per hour.
$20 per day by you+ $20 per day by your spouse = $40 per day of saving
1 year saving is $40 * 365 = $14,600
Now use compound interest calculator.
You are millionaires in 25 years. (7% is historical gain in stock index per year).
There are more fun to it, if you get 2% yearly increment of wage, you can be millionaire in 22 years.
Wait, there’s more to it, if you invest this money in 401(k) plan (retirement saving) and your company matches only 2% of you contribution. You can be millionaire in just 17 years!
Set automatic withdrawal from checking account
Now, before you start finding ways to save $40 per day from household income, set automatic withdrawal of $600 each month from yours and your spouse’s checking accounts.
Get it deposited in to pre-tax (401 k) plan. If you exhaust the limit and still have money left to invest, put the it in IRA/Roth IRA.
I was thanking David for the guide below, to make you understand what you need to do to save 1 hour of your wage.
You can also download the guide from here. He is talking about saving 10% of you income by setting up auto withdrawal so that as soon as it comes to your bank account, it goes beyond your reach.
Moral of the story is it’s not hard to become rich, a disciplined life, coupled with restraint spending, will make you rich one day. How soon it will happen depends on how hard you want it.
Alternatively, if saving an hour of wage is not possible to accomplish every day, you may think of extending work hours by an hour or taking up a side job for couple of hours. You can start home based business as well. There are various ways of earning extra through online businesses. You can start home based business as well.
Readers, will you do a bit of exercise and come up with a plan to save 1 hr of your wage every day? What can you do (sacrifices) to increase your saving to more than an hour of the wage?