How to Save $1 Million By Retirement on a Five-Figure Salary

You’ve probably heard that you’ll need $1 million to retire. You’ve probably also thought that sounded pretty close to impossible—especially if you only have a little saved, or, maybe, nothing at all.

If you are in your 20s or 30s, there’s good news. You have an amazing—but easy-to-waste—advantage when it comes to investing for retirement: time. Thanks to compounding returns (when your investment returns start generating returns and so on), money socked away early has the chance to grow exponentially.

But even if you’re older than that, it’s not too late to benefit from compounding. The most important thing is to start investing, even if you don’t have much to invest yet.

The Benefit of Starting to Invest in Your 20s

Let’s say you’re 25, and haven’t started investing yet, but land a job earning $55,000 (not far below the median income for householders between 25 and 34 years old, which was $62,294 in 2017). Better still, you’re eligible for a nice 401(k) benefit: Your employer matches 50 cents of every dollar you contribute, up to 6 percent of your salary. So you enroll and contribute 6 percent. (Of course you do; it’s free money!) That means you’re investing about $275 pre-tax money per month, and your employer kicks in $137.

Stay the course throughout your career, investing 6 percent of your salary, and you’ll be a millionaire by age 60. And by 65, you’ll have $1.5 million!

But let’s back up. This example is based on a host of assumptions. The first is that you are earning $55,000—which you may not be by 25. If you make less than that, you’ll need to set aside a little more each month or invest for a longer period of time. The example also assumes you get a 3 percent raise each year, and increase your 401(k) contributions accordingly—and that you average 7 percent annual returns from your investments, which is a fair estimate for stock market returns over a long stretch.

Even if those assumptions apply to you, a $1 million prize at the end may still seem too good to be true, especially in the early years, when growth seems paltry. After year one, you’d have only about $5,100 (including your employer match). By 29, you’d have about $31,000. But things accelerate in your late 30s. At 36, you’ll have crossed the six-figure mark; at 46, you’ll have more than $300,000, and by 51, more than half a million.

Better yet, to get there, you’d only have to contribute about $256,000. (Your employer will contribute half that, or $128,000.) Compounding takes care of the rest.

Even if this example doesn’t match your exact situation, it demonstrates the power of investing early, and regularly, and sticking with it so you can reap the benefits of compounding returns. But it’s not too late to hit that $1-million mark if your 20s are behind you.

What to Keep in Mind if You Start Investing in Your 30s

Let’s say you, like many Americans, reach your 30th birthday and haven’t started saving for retirement. Using the same assumptions, you still have time to reach $1 million by the time you’re ready to stop working—but you’ll be 65 instead of 60, like the early saver.

After 30, however, things get trickier. Someone who waits until age 35 would only have $665,000 by age 65. But there’s always hope, and it’s truly never too late to start growing wealth; it’ll just cost you a little more to catch up. Nudge that 6 percent contribution up to 10 percent, and that 35 year old would get to $961,000 by age 65 (and more than $1 million just a year later, by 66).

How to Have Enough by Retirement Without an Employer Match

So far, we’ve assumed that each investor has the benefit of both an employer-sponsored retirement account (and one-third of non-unionized American workers don’t) and a generous match (which about a quarter of employers with 401(k)s don’t offer). Remove the 3-percent match from our first example, and the person who started at 25 years old would still have $1 million by 65.

You can also become a millionaire by 65 by investing $4,700 per year in your own Individual Retirement Account, which is accessible to anyone who’s earned income in a given year. That’s 8.5 percent of a $55,000 salary, but it would become less as you earn more over time.

In other words, becoming a millionaire is not impossible, even if an employer isn’t helping you out. But it bears repeating: Investing early is key. Starting at 35 in the above scenario means you’d have $475,000 by 65. Maxing out the IRA—the current limits are $5,500 per year, or $6,500 if you’re 50 or older—would still only yield about $580,000 come retirement time.

Sure, rent, debt and all your other bills could make putting aside several hundred a month a little daunting. But remember, depending on the type of account you have, your contributions could be pre-tax, meaning you won’t feel it as much in your take-home pay.

And even if it requires some sacrifice now to get there, the payoff of being in good financial shape (even if you don’t quite hit $1 million) by the time you want to stop working should be worth it.

This article was updated on Sept. 27, 2018

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Finally, a Budget You’€™ll Actually Want to Follow

You can probably give a lot of reasons why budgets haven’t worked for you in the past. You’re busy. You have an aversion to spreadsheets. You don’t have time to log all your purchases. You don’t want to deprive yourself of that daily latte no matter what those so-called “experts” say. (Good news: You don’t have to.)

Sound familiar? Then you’ve been thinking about budgeting all wrong.

“Every individual’s goal is to be happy,” says Terrance K. Martin, director of financial literacy programs at the University of Texas-Pan American. “If you can frame money as a medium of exchange to buy things that make you happy and put it in real terms that matter to you, that forces you to act and take control of your finances.”


Martin’s not suggesting you start “happily” swiping your Visa whenever you want and calling it budgeting. He’s talking about reframing your whole approach to spending and saving so you direct more money toward purchases and experiences that bring you joy and less toward those that don’t. (You’d be amazed at how much you’re probably spending on stuff that doesn’t up your happiness quotient.)

How to put that into practice? Try these steps to build a budget you’ll actually want to follow this year.

1. Make room for what matters most.

If you don’t tailor your spending plan to your own preferences and priorities, it won’t work. It’s that simple.

Yes, you need to account first for your must-have monthly expenses—your rent or mortgage, groceries, and utilities. And don’t forget non-monthly bills, like insurance or taxes, and financial goals—such as building an emergency fund, contributing to an investment account, and paying off debt.

After that, think hard about the things and experiences that make you happy. It could even be that daily latte, if it brings you joy to sit and sip it in Starbucks every day. Or it might be giving some of your money away.

That’s a top priority for Philip Olson, a certified financial planner based in Austin, Tex., with Ameritas Investment Corp. “My wife and I give to charity more than anyone we know—not because we’re such amazing people, but because it’s in the budget,” he says.

And don’t forget to factor in fun. “You have to have a reasonable amount of spending money in your budget,” says Shanda Sullivan, an Oklahoma-based certified financial planner at Sullivan Financial Strategies. “Otherwise, you’re going to bust it.”

It’s all about tailoring your plan to reflect the way you want to spend your time and money. “You have the power to decide where your dollars go and what dreams you can go after,” Olson says.

2. Cut out what doesn’t.

Here’s where you have to be vigilant. A lot of us are losing a lot of money each month simply out of laziness or because we didn’t plan ahead.

Did you forget to cancel that “free” trial after the 30 days was up and you started getting charged? Or the auto-renewing subscriptions to magazines you don’t read or could get online? Are you paying fees for out-of-network ATM withdrawals because you don’t feel like walking an extra couple of blocks? Spending money on expensive (and not especially good) airplane meals because you forgot to pack a snack? Or running out to a convenience store for household items that cost twice as much because you forgot to stock up?

When was the last time you checked the fees you were paying on your bank account? (There are lots of free or low-fee checking accounts out there.)

Are there gym memberships you’re not using but still pay for? Are you still paying for cable even though 90 percent of what you watch is on Netflix or Hulu?

Be merciless. Cut out every expense that is not giving you real value for the money you’re putting into it, and you can start directing that money toward purchases that do.

3. Don’t sweat the small stuff.

Make smart choices about big items in your budget, and don’t obsess over pinching pennies. After all, if you’re spending 50 percent of your take-home pay on rent, cutting out coffee isn’t going to help much anyway. Bonus: Minimizing major expenses—like transportation, housing, or utilities—leaves more wiggle room for the occasional unbudgeted splurge.

Taking aim at the big expenses may mean finding a roommate, opting for a cheaper car, or spending a few hours calling up service providers to negotiate better rates on your heftiest bills.

One exception on small stuff: Those seemingly “small” fees you get charged on bank or investment accounts and related services like using out-of-network ATMs. They can add up fast. So hit your bank’s ATMs or get cash back at grocery or drugstores that offer it for free, and look for low-fee accounts. You can compare accounts on sites like Bankrate.

4. Know where your money goes.

Once you’ve put together a personalized spending plan, decide how you’ll track your monthly progress.

“Seeing your expenses—and not just in your head—is pretty sobering,” Olson says. This is how you’ll know if the budget you’ve laid out is realistic, or if it could use some tweaking to better align with your priorities.

Online budgeting tools and apps like MintLevel MoneyYou Need a BudgetmvelopesWallyBillguard, and Dollarbird make this exercise pretty painless by allowing you to link bank accounts and credit cards and tracking your spending for you.

Of course, you could also just boot up Excel or go old school with a pencil and paper. After all, it matters less how you make your budget than that you stick to it.


The Three-Step Budgeting Process That Helped Me Stop Living Paycheck to Paycheck

This is the story of Sam Price, a 43-year-old insurance broker in Birmingham, Ala., as told to Marianne Hayes.

In my former life, I was a broke 20-something. I lived paycheck to paycheck, routinely charged everything from rent to gas and had a credit score in the 500s. As my 30s neared, I was $15,000 in debt and months behind on my utility bills.

Everything changed when I met my now-wife Chrisynda. I couldn’t imagine saddling her with my debt, so I made some drastic moves, like moving in with my parents. Thanks to a simple budgeting process and thedebt snowball technique, I wiped out my balances in about 13 months. Over the next year, I saved $8,000 to cover Chrisynda’s wedding ring and our honeymoon before walking down the aisle.

That was just the beginning of my turnaround story. Since blending our finances, we’ve stayed loyal to my budgeting process to keep us financially fit for the long haul. Here’s how it works.

1. Look for money wasted.

When I was whipping my own finances into shape, I tracked my spending and looked for obvious money wasters. I discovered, for example, that I was spending $65 a month on video games alone and decided to sell my gaming systems and opt for hikes over screen time.

After merging finances, Chrisynda and I pored over our bank statements to understand where our money was going. A recurring bank charge stood out immediately, so we switched to another bank with free accounts. We also cut our food spending in half after learning we were dropping $350 per month on restaurants and takeout. And we opted for a slimmed-down cable package, shaving $45 off our bill.

2. Pinpoint where you’re overpaying

I’m a big believer in the power of negotiation. I’d been paying $50 per month for a gym membership when I noticed a new gym opening in my area. I offered to pay $200 for a one-year membership. They were hungry for new customers and took my offer, saving me $400 annually! I’d do the same years later with our electric bill, which could hit $400 in certain months, locking in a year-round rate of $200.

We looked to our employers for missed savings opportunities, too. We started using employer-sponsored health savings accounts to set aside pre-tax cash, shaving about $1,800 off our yearly medical spending. We also discovered that Chrisynda’s employer offered a 5-percent discount with a major insurance carrier for employees who bundled home and auto coverage. We signed up and reaped $1,200 in annual savings.

3. Sacrifice now to make a big difference later.

Sometimes you need to make sacrifices in the name of financial stability. In 2010, when Chrisynda and I started planning for a family, we eliminated a $200+ car payment and lowered our insurance premium by selling my relatively new truck. We used the profits to pay off the loan before buying a used sedan and putting the rest in our emergency fund.

Financial security is all about tradeoffs—and looking back, they’ve all been worth it. We’re debt-free, have a six-month emergency fund and regularly invest 10 percent. My once-sad credit score is now around 800.

What I’ve learned is that these things don’t just happen. Some attention and reasonable sacrifice is required, but once these habits become routine, keeping up with them is much easier than dealing with the stress of living paycheck to paycheck.


Tony Robbins on Starting ‘With Very Little’ and Finding Financial Success

Tony Robbins knows a lot about starting with a little. The best-selling author grew up “dirt poor” in California and once worked as a janitor to help pay the bills. Today, he’s worth an estimated half-a-billion dollars.

Now Robbins—whose personal and business development seminars and books have reached an estimated 50 million people—is focused on helping others build their fortunes, too. He interviewed more than 50 of the world’s top investors for his last book “Money: Master the Game,” a New York Times best-seller that’s sold more than a million copies.

His latest book, “Unshakeable,” which came out last year and has since become a New York Times best-seller as well, was written with Peter Mallouk, Barron’s top-ranked independent advisor for three years and president of Creative Planning, whose board Robbins joined. Robbins describes it as “a financial playbook that dispels fear with facts,” and has donated proceeds to Feeding America, a nationwide hunger-relief organization.

He spoke with us about how to “lock in” financial success and keep fear from sabotaging our efforts.

Why did you write this so soon after publishing a nearly 700-page money book?

This is the second longest bull market in history and everyone knows it’s going to have a correction at some point. I started seeing so much fear out there. And I thought…I want to protect people, but I also want them to see how this could be an opportunity for the greatest growth.

Why “Unshakeable”?

Because that’s my goal. The only way to have a quality life is to be unshakeable. It doesn’t mean you don’t get fearful, but you don’t stay there. For most people investing is stressful. But anyone can become unshakeable. You just need to educate yourself…It’s like the old metaphor: You’re walking late at night and you see a snake so you walk the other way. Then during the day, you see it’s not a snake at all. It’s a rope, and you have nothing to be afraid of.

How do you convince nervous investors they have nothing to fear?

With education. On average, we’ve had a correction (when the market falls 10 percent from its peak) once a year since 1900. Everybody gets scared to death. But the average one lasts less than two months and out of all of them, 80 percent never become a bear market (meaning the market falls 20 percent from its peak).

We get a bear market on average every three to five years and they usually last a year. And every single bear market in history has turned into a bull market. Every single one.

The most important thing is to just be in the market.

What’s the biggest mistake investors make?

Failing to take advantage of compounding. Take someone who invests eight years till he’s 27 and invests a total of $28,800, or $300 a month, and then just leaves it there—doesn’t add another penny. He’ll have nearly 2 million when he retires at 65 if the market continues to compound like it has (at 10 percent or more annually on average).

If his buddy doesn’t start till he’s 28 and he invests $300 a month, he’ll have invested $140,000 by the time he retires at 65. But his compounding returns will end up at almost $300,000 less than his friend. He’ll be investing longer and more—and he’ll end up with less. Compounding is the ticket.

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Starting late allows less time for compounding, true. Investors can also miss out by selling when the market is down and buying after it rises again, locking in losses. How do you avoid mistakes like that?

The first thing to do is to stop trying to time the market. No one can do that successfully. One of the most startling statistics that blows people’s minds is that in the last 20 years we’ve seen about an 8.2 percent compounded annual returns for the S&P 500. But if you missed the 10 best trading days in that 20-year period, your returns drop to 4.5 percent.

If you missed the top 20 days, you only made 2.1 percent (based on an analysis by the Schwab Center for Financial Research). What are your chances of getting that timing right? The most important thing is to just be in the market.

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How do you guard against the temptation to sell when the market drops?

You need to automate it and take yourself out of it. And you need to have the right asset allocation. That’s the way you protect yourself.

What’s the right asset allocation?

The most basic thing is diversification. You can’t just say, I like real estate or I like stocks, and that’s it.

I talk about different asset allocation strategies in the book… But you need to diversify across asset classes and within asset classes and across economies and time. (Investing, for example, in stocks, bonds and real estate—and in small, large and U.S. and foreign companies, and corporate and government bonds with different payout dates.)

What’s the main message you want readers to take away from this book?

I want them to know financial freedom is not only possible, but it’s something you can lock in. It isn’t that complex. People in the finance business try to make it as complex as possible. But it’s not.

Literally anyone can start with very little and achieve financial freedom over time. You just have to get into the game, and not get overtaken by fear. This interview has been edited and condensed.

What Are FAANG Stocks—and Why Does Everyone Want Them?

On Wall Street, FAANG is spelled with two As, and means “big win” for their lucky shareholders—which likely includes you. FAANG stands for Facebook, Amazon, Apple, Netflix and Google (representing parent company, Alphabet), a collection of tech companies so widely followed by investors that the media came up with an acronym for them.

Why are they such a big deal?

Each company has been known to move markets and transform not just their own industries, but also how we all live.

Consider Amazon. (It was the original “A” when Jim Cramer first coined the term to quickly refer to the group of fast-growing tech stocks; Apple was added later.) The online megastore has made shopping fast, easy and accessible, crushing its competition and completely changing the way retail operates. Many consumers now expect to be able to purchase anything, anytime, with one click and free shipping.

Amazon’s investors may have equally high expectations. Five years ago, the company’s share price was around $300; it ended the first week of July above $1,700 a share. And with a current market capitalization of about $830 billion, it’s the third-heaviest component of Standard & Poor’s 500-stock index, behind Apple and Microsoft.

Even the smallest FAANG member, Netflix, is a heavy hitter. Its market cap is about $177 billion, weighing in at 0.75 percent of the S&P 500. And over the past five years, its shares have skyrocketed from less than $40 in July 2013 to more than $400 in July 2018.

Together, the five companies make up approximately 13 percent of the index with a collective market cap of nearly $3.8 trillion. So if FAANG was a country, and its market cap was its gross domestic product, that’s big enough to make it the fourth-largest economy in the world.

Plenty of exchange-traded funds (ETFs) count FAANGs among their holdings.

So, should I buy them?

Well, the group’s history of success certainly warrants consideration, but whether each company can maintain the heady growth is debatable. Then there’s the issue of price: To buy just one share of each FAANG stock, you’d need more than $3,600 total (as of July 9). And keep in mind that five U.S. large tech stocks doesn’t exactly make for a diversified portfolio.

Luckily, there’s a simpler, much cheaper way to buy into FAANG stocks while protecting yourself from any potential slowdown. In fact, it’s so easy that you’re already doing it.

Plenty of exchange-traded funds (ETFs)—including one in the Acorns portfolios (VOO) that tracks the S&P 500 index—count FAANGs among their holdings. These type of funds also give you a stake in hundreds of other companies at once. That means you get exposure to the world’s most popular stocks while maintaining a diversified portfolio in one fell swoop—a smart and easy investing strategy to build and preserve your wealth over the long term.


The 4 Habits of Janitors, Secretaries and Teachers Who Became Millionaires

With the right habits, anyone can become a millionaire, not just hotshot bankers, corporate CEOs and tech geniuses. There are plenty of unassuming people who, despite working regular jobs—think: janitors, secretaries and teachers—have amassed serious wealth over their lifetimes. And you’d never know it by the way they lived.

How do these undercover millionaires climb to the top? We discovered four simple habits they have in common. Follow their lead and start building your own fortune, too.


1. Live (well) below your means.

Low-key millionaires couldn’t care less about keeping up with the Joneses. “They are not attached to having the newest, the biggest or the most expensive anything,” says Certified Financial Planner Kimberly Foss, founder of Empyrion Wealth Management.

Case in point: Ronald Read, a janitor and gas station attendant in Vermont who bequeathed $8 million to his local library and hospital, had a second-hand Toyota and used safety pins to hold his tattered coat together. Grace Groner lived in a one-bedroom in Chicago and shopped at thrift stores and rummage sales, even though she’d accumulated more than $7 million. Russ Gremel, another Chicagoan, prefered oats and stew to fancy meals, drove a 25-year-old Dodge—and recently donated $2 million to the Audubon Society.

While the general rule of thumb is to save 10 to 20 percent of your income, secret millionaires put away much more—a friend of Read’s mentioned that if he earned $50, he’d save $40. Certified Financial Planner Cary Carbonaro, managing director at United Capital, suggests aiming for around 30 percent if your goal is seven digits: “The additional compounding interest will make your money grow and grow,” she says.

2. Invest early and often.

Secret millionaires know to hang onto stocks for the long haul instead of selling when the market dips. Gremel purchased $1,000 worth of Walgreens stock and held onto it for 70 years. Groner’s fortune grew out of a $180 investment she made in 1935. And Brooklyn locals Donald Othmer, a professor, and his wife Mildred, a teacher, amassed hundreds of millions, stemming from Berkshire Hathaway stocks they invested in for just $42 back in the ’60s. (Today, one share is worth more than $280,000.)

These millionaires don’t just avoid timing the market; they also reinvest their dividends. When you purchase individual stocks or funds, like exchange-traded funds, through an investment account, you have the option to take your dividend payment in cash or reinvest the proceeds into the purchase of additional shares. Reinvesting allows your money to compound more over time, giving you a greater overall return.

These millionaires don’t just avoid timing the market; they also reinvest their dividends.

3. Earn more on the side.

In addition to his day job, Donald Othmer netted extra income with his side gig as an inventor and consultant. Leonard Gigowski, a butcher in Milwaukee, earned enough from investing in his grocery store’s stock to eventually purchase a corner store, nightclub, dance studio and residential properties.

“With passive income, like real estate, you don’t have to do any work,” Carbonaro says. “Aside from maintenance and expenses, you just sit back and collect the check.” Airbnb, for example, makes it easy to add a passive income stream by renting out extra space or your entire place when you’re away.

4. Improve your financial IQ.

Read stayed in the know by reading investing news, talking with like-minded friends and seeking counsel from an advisor. Robert Morin, a librarian in New Hampshire with a $4 million estate, befriended a financial advisor who encouraged him to invest, instead of putting all of his earnings into checking and savings accounts. Brooklyn legal secretary Sylvia Bloom, who recently passed away with $8.2 million, noted the stocks her bosses invested in, then purchased the same ones (in more modest amounts) for herself.

Copy these habits by making learning about money a daily ritual: You can follow your favorite financial guru and publications on social media, or commit to reading money blogs and sites (ahem) during lunch or your commute. Then seek out a money mentor or even an accountability partner who’s working toward their own first $1 million.


How Can I Save Enough for Retirement Without a 401(k)?

What do you do if you’re among the one-third of non-unionized American workers who don’t have access to a 401(k) retirement plan at work? You’ve got options. Whether you’re an entrepreneur, freelancer or full-time employee, here’s how to build wealth on your own.

Think about how you spend today, and how that might change down the line.

1. Create a retirement goal.

Before selecting an account, determine how much you really need to save in order to stop working one day, based on what you want your life to look like.

Think about how you spend today, and how that might change down the line. For example, you won’t be saving for retirement, so you can mark that item off your budget—but you could be paying more for health care than you do today. You can also use an online calculator to help nail down a number. With that in mind, you can develop a retirement strategy, using one of these account options:

2. Open an Individual Retirement Account.

Just about anyone with an income—or even a spouse with one—can open an IRA. Popular types include a Traditional IRA, Roth IRA and SEP IRA. (Acorns Later offers each of these three options.)

Traditional IRA: You can contribute up to $5,500 ($6,500 if you’re 50+) in 2018, and contributions may be tax-deductible, depending on your income and spouse’s access to an employer-sponsored plan. Tap it early, and you’ll pay a 10-percent penalty, plus income taxes.

Roth IRA: If you meet certain income requirements, you can contribute a max of $5,500 of after-tax income. Then your money grows, and can be withdrawn in retirement, tax-free. You can tap your contributions—but not any investment gains—anytime, without penalty.

SEP IRA: A simplified employee pension allows self-employed people (including side giggers and freelancers) to make big pre-tax contributions for themselves and any employees. You can contribute up to $55,000 or 25 percent of compensation, and you can deduct at least a portion of your contributions today and won’t pay income taxes until retirement.

3. Consider a Solo 401(k).

Free from age or income restrictions, a solo 401(k) plan permits any self-employed individual with an employer identification number to contribute up to $55,000 (plus $6,000 if you’re 50+) in 2018. Like IRAs, you can go the traditional route with pre-tax contributions, which are tax-deductible today. Or you can open a solo Roth 401(k) and contribute after-tax cash, which grows tax-free. The catch is that you can’t have any employees, aside from a spouse.

4. Invest in a regular brokerage account.

Once you’re in the hang of saving for retirement, you might want to invest more. If you don’t have any self-employment income and have already maxed out a traditional or Roth IRA, you can invest in a regular brokerage account, like your Acorns core account, which has no contribution limits.

There aren’t restrictions around when you can access your money, but keep in mind that for long-term investors, it pays to stay the course rather than making regular withdrawals.

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5 Money Lessons That Could’ve Saved Me Thousands

Over the past seven years, I’ve accomplished a lot of my money goals: I paid off $52,000 of debt in just seven months; adopted smart habits that grew my business and net worth; and figured out how to save throughout the year, so I’m never surprised by pop-up expenses.

But for every right thing I’ve done with money, I’ve done another five things wrong. If I could go back in time and tell myself anything, I’d start with these five lessons.

1. Start budgeting when life is simple.

When I first started making my own money, life was simple. I basically just needed enough to afford cheap rent, gas, a cell phone, pizza for dinner and beers on the weekend. But as I got older, life naturally became more complicated. And as much as I thought I could keep track of everything in my head, it didn’t work out that way.

Pizza and beers turned into a mortgage, groceries for my growing family and co-pays—on top of stuff my wife and I wanted, which ultimately led us down the path to racking up debt. We wasted thousands by failing to make a plan for the money we had coming in and going out. And it was a lot harder to fix that ingrained behavior once I’d been doing it for years.

2. Car payments drag you down.

Did you know that the median household income in America is $59,000 and yet the average price for a new car is more than $35,000? Maybe that doesn’t sound too crazy (but it is!) because it’s what many of us consider normal.

Years ago, I made this mistake of purchasing a new car that represented a whopping 70 percent of my gross annual income. Of course, the only way to afford it was to set up payments over 66 months, while that car continually dropped in value. I did eventually sell that car—for a huge loss—but not before spending thousands, which is why I’ll never buy a new car again.

I spent way too much time paying interest on debt rather than earning it on my investments.

3. Always live below your means.

No matter how much we make, it can feel like there’s never enough leftover each month. In fact, according to a Money Magazine report, “people’s peak earning years also appear to be their peak debt years.” Ouch.

You might’ve put this together from my first two lessons, but back in 2011, my wife and I found ourselves in financial trouble. We were earning more than we ever had, yet were also running up huge credit card balances because we didn’t tell ourselves no. To add insult to injury, our overspending meant we were undersaving, meaning we were digging ourselves further into a hole, and further away from building wealth.

4. Time trumps money.

You can always find ways to earn more, but you can never recoup lost time. Albert Einstein once said compound interest—when time and money work together—was the 8th wonder of the world, and he was spot on. Here’s an example I wish I’d understood years ago:

Start investing $2,000 a year at 18, and you’ll have nearly $89,000 in 18 years, assuming an 8-percent average annual return. Even if you stop and let it ride, that can turn into $522,000 by age 65! On the other hand, wait till 36 to start investing $2,000 a year—and continue until age 65—you’ll have just $143,000, despite contributing a lot more money.

I spent way too much time paying interest on debt rather than earning it on my investments, and I didn’t get serious about investing until I was 28—meaning I left thousands on the table.

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5. You will always need $1,000 handy.

Did you know 40 percent of Americans can’t cover a $400 expense with savings? And yet everyone will have a financial emergency at some point. That’s why emergency funds are so important. Ideally, you’ll work up to having three to six months’ worth of basic expenses saved, but $1,000 is a good first goal. This will cover most regular unexpected expenses like car repairs or a minor medical bill.

I remember when my alternator died years ago. It should’ve been an easy $500 fix. Instead, this small car repair triggered a freakout moment, following by a period of “oh crap, poor me” because we had to pay with a credit card with 20-percent interest. Worse, we were already carrying a balance from the previous month’s emergency, and this dug us deeper into the hole.

If you start working on an emergency fund now, you’ll spare yourself the anxiety I had of worrying about these small hiccups that should be non-issues.

6 Ways to Grow Your Money Without Even Trying

Building wealth sounds like something that requires endless amounts of time that, let’s be honest, many of us just don’t have. But the reality is that often, we can accomplish more with our money by doing less. Take these six “slacker” moves.

1. Don’t jump when the market does.

Stock prices can fluctuate based on a variety of factors—from political drama to corporate earnings and new economic data—so it’s nearly impossible to predict what’s coming and when. That means people who panic-sell are much more likely to miss out on future returns than to benefit from taking action.

What to do when the market suddenly drops? Nothing. Give yourself permission to stop watching the news and stalking your account balance. The best approach is usually to just stick it out. Remember that the U.S. stock market has gone up significantly over time; it just doesn’t climb in straight lines.

Setting up automatic transfers to your savings and investment accounts ensures you’ll never forget to do it

2. Automate your savings.

This one’s a no-brainer. Setting up automatic transfers to your savings and investment accounts ensures you’ll never forget to do it, and you won’t accidentally spend the money on other stuff first.

Set Up Recurring Investment

3. Bump up your 401(k) contributions automatically.

It’s easy to want to invest more for retirement, but it can be hard to actually make it happen. Enter: “auto-escalation.” It’s a feature as many as 60 percent of employers offer as part of their 401(k) plans that automatically increases your contributions on a regular schedule, like around raise time.

If you’re one of the 34% of Americans who don’t have access to a 401(k)—or if you want to invest even more—consider opening an Individual Retirement Account. (Acorns Later offers Traditional, Roth and SEP IRAs.)

Check Out Acorns Later

4. Become a digital stranger on your favorite shopping sites.

According to one survey, Americans waste a whopping $450 every month on impulse buys. If “1-click” shopping is your budgeting kryptonite, just say no to autofill—and save by virtue of the fact that you’re probably too lazy to get off the couch, hunt down your wallet and type in your credit card number.

5. Shop your own cabinets.

Speaking of impulse buys, it’s not just online shopping that gets us in trouble. The average American makes 1.5 weekly trips to the grocery store, which presents plenty of opportunities to fill your cart with stuff you don’t really need (especially if you’re shopping hungry). So instead of immediately heading to the supermarket, save yourself a trip and scope out your own kitchen for food that might otherwise be wasted.

6. Nab a last-minute travel deal.

You had good intentions to plan your next vacation months ago, but, well, you didn’t get around to it. Lucky for you, waiting till the last minute can pay off. Try the last-minute deals section of Expedia (a Found Money partner), where you can save hundreds on hotel and flight packages; visit HotelTonight (another Found Money partner) for up to 50 percent off accommodations; or look into, where you can book upcoming voyages for just $50 to $75 a night.

Shop Found Money

WRITTEN BYCathie EricsonCathie is a Portland, Oregon-based freelance journalist whose work has appeared in Forbes, LearnVest, Costco Connection and others.


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How Can I Save Enough for Retirement Without a 401(k)?

Double your Email List with Powerful Landing Pages

An effective landing page is one of the most useful tools in your marketing arsenal.  I’ve used them successfully for many years and I always advocate their use to other people.  A landing page is where all of your new web traffic is directed.  It’s the main focus of your traffic generating efforts and it’s also the first thing your visitors will see.

And contrary to what you might think, the best page for new visitor is probably NOT your homepage. A good landing page will grow your opt-in list while preselling at the same time.

Creating a Webpage

The first step in creating a landing page is choosing the platform.  Landing pages have been made using nearly every method imaginable.  The trick is to choose one which is easy for you to use while, at the same time, making sure it works on a variety of devices and browsers.

WordPress is one of the most popular options because it is so easy to use.  It has become an industry standard platform and is versatile enough for a variety of uses.

You basically purchase a domain name and web hosting, install WordPress for free, and then install a free or paid WordPress theme (site design). Other options include things like OptimizePress (a fantastic theme for squeeze pages), Drupaal, or even basic HTML if you know how to write code.

Headlines and Sub-Headlines

Search around and you’ll find that headlines are used in all of the most effective landing pages.  This is the first bit of text anyone will see.  It’s basically the title of your landing page and should grab the visitor’s attention.  Sometimes you will only have a few seconds to capture that person’s attention, so the headline needs to be strong.

Sub-headlines can be a great addition when using a lot of text.  You can think of these like chapter titles in a book except you’ll be using paragraphs instead of chapters.  These are great additions because people might skip over some of the text to get to the information they want. Make these strong, too, but save the most important benefits for the main headline.

Landing Page Layout

The way you design and arrange your landing pages is important.  It can be a good idea to look at a few successful examples created by other people.  The headline should be right at the top, followed by a bit of sales copy and information about the offer you’re presenting under it.

Images can also help add impact to a landing page.  Pictures of the product, as well as stock photos and other inspirational images, can help your visitors connect with your offer.  Or, in the same place, you can have a short video that says the same thing. Or both!

At the end (or usually on the right side of the screen) is the call to action which, in this case, is an opt-in form.

Videos vs Text

For a long time, landing pages were all about text.  With web based video becoming so popular, however, many marketers are utilizing this state-of-the-art technology.

Videos make presenting information incredibly simple.  They require less work on behalf of your visitors and can deliver a large amount of information in a short period of time.  Videos are inexpensive to produce and there are a number of ways to have one created for you.

Opt-in Box

The opt-in box is a simple form which allows visitors to submit their email address.  They usually do this in exchange for a free gift.  This is the main purpose of your landing page.  When they fill out the form, their address is added to your opt-in mailing list.  You can now keep in touch with these leads and present them with great new offers later on.

Building effective landing pages is a bit of an art, and testing to see what works is more scientific.  It can be hard to figure out exactly what works over time.  If you’ve tried everything and still aren’t seeing your list explode, then it’s time to discover the secret—the 4th ingredient to my master Sales Formula can instantly double your income overnight. Find out how by clicking now.