Repeat after me “1, 2, 4, 8”. Again, “1, 2, 4, 8”. Commit it to memory, “1, 2, 4, 8”. What am I up to? I’ll spare you the underlying math, disclaimers, and assumptions but trust me, it is reasonable to expect that money can double in 10 years. If you save $1 by age 30, it can double to $2 by age 40. It can then double again to $4 by age 50. And double again to $8 by age 60. Say “$1, $2, $4, $8”. Notice how the last doubling (from $4 to $8) yields 4x the original $1 you saved! Pretty incredible, uh? Remember though, you will only get that last doubling if you started saving in your 20s. If, on the other hand, you start saving in your 40s, and you save $1 by age 50, then it may only double once to $2 by age 60. Imagine if you save $10,000 or $25,000 by age 30? If so, you may be on a path to becoming a millionaire, helped by the fact that you can save more in your 30s, 40s, and 50s when you have higher earnings power.
Start young! Start saving in your 20s. “Set Your Sights on 30” means to focus on achieving a specific savings goal by age 30. Unlike a vague long-term goal like “save for retirement”, it is easier to be driven to achieve a more near-term goal. And success breeds success! Reaching a near-term goal will give you the confidence that you will eventually achieve long-term goals as well.
Let’s illustrate the above point. Have you ever run a marathon? I’ve run one full marathon in my life. Full disclosure, I hated every minute of it, as well as the 100s of miles of training during that humid summer. I also have no desire to do another. But I did finish. More relevant to this discussion is that at no time in the first 5, 10, or even 13 miles, was I thinking of mile 26. The only way to succeed (and survive the pain) was to think in the moment and to have a short-term goal. So too with money. ‘Set Your Sights on 30’ (age 30) provides the interim goal you can be driven to achieve.
There is something even more special about setting, striving for, and achieving a financial goal by the age of 30 - the mindset you adopt and life skills you learn and apply to reach the near-term goal will benefit you, and power you through, your whole life. Focusing on a specific savings goal by age 30 will put you on the path for sustained, life-long financial success.
Your Sherpa LLC is here to help. Your Sherpa is Your Guide. For more information including our FREE eBook and videos go to www.yourfinancialsherpa.com