When we talk about money, it’s easy to get swept up in the idea of being rich. But building wealth is a more empowering and sustainable goal. Wealth isn’t just about having a large bank account; it’s about creating financial security, independence, and the ability to live life on your terms.
Building wealth starts with clear financial objectives. Ask yourself: What do I want my money to do for me? Is it retiring early, funding my children’s education, or pursuing a passion? Having specific goals provides the foundation for your financial plan. From there, saving and investing become your tools for making those goals a reality.
The magic of investing lies in compounding. Compounding allows your money to grow on itself over time, turning small contributions into significant gains. But time is key—the earlier you start saving and investing, the more compounding works in your favor. Even small, consistent investments can grow substantially over decades.
Let’s say you invest $10,000 at age 25 with an annual return of 7% (pretty standard for long-term investing). You add nothing else, just let it grow. By 65, that $10,000 has turned into $150,000!
Now, imagine your friend waits until age 35 to start and invests the same $10,000. By 65, she’ll have $76,000. Still good, but way less than you. Why? Your 10-year head start gave compounding more time to work its magic.
Now let’s turn up the volume:
- You invest $5,000 every year starting at 25. By 65, you’ll have over $1 million.
- Your friend starts at 35 and invests the same $5,000 annually. She’ll end up with about $500,000.
Prioritize starting now, no matter where you are in your financial journey. Remember, it’s not about getting rich overnight; it’s about building a solid financial future for the long term.
Article contributed by: Lindsay Hollinger
No products in the cart.