Money is tied to your dreams and goals, but how to make it all work out in the end? Well, once you have your goals, you make a plan. The plan is all about small steps and incremental, achievable goals. Your dream, for example, could be to have $1,000,000 in the bank by age 40. Let’s break that down:
First of all, what is a million? What does a million even look like? A million dollars is $1,000 times 1,000 – not difficult to do in your lifetime.
So how do you reach your first $1,000,000? Again, start small and start early. You can go to http://www.bankrate.com/calculators/savings/save-million-calculator.aspx, and calculate how to reach your saving goals there are many more online calculators to help you with this goal.
If you have not saved anything at the age of 40, you will need $1,270 monthly at 7% yield (calculating inflation at 3%) to reach your goal at age 65 of $1,000,000. However, if you had started at age 25, you would only need $403 a month to reach the same goal. Time is the difference. You could always try for 8% but remember, the higher the yield, the higher the risk. Risk and returns must work together so you don’t want to take on a risk that is out of proportion to the reward. A Certified Financial Planner ™ (CFP® that has a holistic approach. As a CFP®, I have found this is the best approach to work with people since it looks at the person’s entire life and lifestyle. Holistic does not just look at individual parts of Financial Planning it uses the whole economic, social, environment, values, family and life of the person.
“There’s no time like the present, no present like time,” said Georgie Bying.
Have questions? Contact Lillian M. Meyers.
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