We all dream of having a bank account filled with at least a million dollars earned from our hard work or simply winning the lottery. Putting in long hours and having more than one job doesn’t equate to making tons of money. If you are waiting to be a lottery winner, keep waiting since the chances are one in 14 million.
Having a million in your bank account is more about smart planning and savings. That means you don’t need to have the latest tech device or buy everything designer-made. Here is the advice on how to be rich from the experts.
According to financial adviser and author of Couples Finish Rich, David Bach, says people need to know one thing.
Pay yourselves first and foremost.
He is speaking from experience since he made his first million by the time he was 30 years old.
It doesn’t have to be a lot of money either. Most 20-year-olds are not making over $100,000 so starting with as little as $2/day is enough to get you there.
For some, it may mean giving up the daily fancy coffee or the beers.
The graph below shows how much you should be putting aside when you are 20, 25, 30, 35, 40, 45, and so on.
If you can do more, by all means do it.
Bach admits their magic number is 20. “Today, my wife, Michelle, and I each strive to pay ourselves the first 20% of our gross income,” he says.
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You should also talk about finances with your partner.
“Smart couples talk about money all the time,” Bach reveals. “When you work together on your finances, you can compound the results. When you don’t, the same can be said for the mistakes you will invariably make.”