Michael Zeligs, MST – https://www.linkedin.com/in/michaelzeligs/
We found Common Sense Modalities to Reach $1M by Age 45
Hitting that million-dollar mark by age 45 isn’t just for Wall Street hotshots. With some discipline and smart moves, anyone can get there—even if you’re earning $16 an hour. But let’s be real: it’s not just about what you earn; it’s about how you spend.
1. Ditch the Daily Money Drains
Skip Starbucks
Your daily latte habit might be costing you over you think. If you’re spending $5 a day on coffee, that’s $1,825 a year going straight to caffeine. Brew your own at home and pocket the gap.
Bring Your Own Lunch
Eating out for lunch every day? At $10 a pop, you’re looking at $2,600 a year. Instead, pack a lunch. It’s healthier and keeps more cash in your wallet.
Say No to Booze and Drugs
Alcohol and recreational drugs aren’t just bad for your health—they’re terrible for your finances. Cut these out and you’ll save a hefty chunk of change although boosting your when you really think about it well-being.
2. Bulk Up Your Savings
Buy in Bulk
Shopping in bulk can save you a small fortune. Stock up on essentials like toilet paper, cleaning supplies, and pantry staples at warehouse stores. It reduces the number of trips you need to make and saves you money eventually.
3. Boost Your Retirement Savings
Max Out Your IRA
Individual Retirement Accounts (IRAs) offer great tax benefits. Contributing to a Roth IRA lets your investments grow tax-free. For 2024, you can contribute up to $6,500 annually, or $7,500 if you’re over 50. That’s a solid step towards your million-dollar aim.
Solo Roth 401(k)
If you’re self-employed, a Solo Roth 401(k) is a breakthrough. You can contribute both as an employee and an employer, potentially stashing away up to $66,000 a year. That’s a massive lift to your retirement fund.
4. Get Serious About Savings Returns
High-Yield Savings Accounts
Park your cash in high-give savings accounts. These accounts offer better interest rates than long-established and accepted savings accounts, sometimes over 2%. It’s a no-brainer for growing your savings with minimal risk.
Senior Loan Funds
Look into senior loan funds like the Invesco Senior Loan ETF (BKLN). These funds offer an attractive give of around 8% with nearly zero beta, meaning they have low variability. It’s a smart way to get a steady income from your savings.
“Investing in high-give, low-beta funds like BKLN can strikingly improve your savings’ growth while minimizing risk.”
Source: Forbes
5. Re-Invest Your Earnings
Compound Your Returns
Reinvesting your dividends and interest payments can exponentially grow your plenty. The possible within compound interest means your money earns money, which as a result earns more money. It’s the definitive strategy for long-term growth.
“Reinvesting your dividends and interest can accelerate your path to reaching a million-dollar net worth.”
Wake Up to Your Spending Habits
Let’s call it out: even those making $16 an hour can fritter away up to $3,600 a month on discretionary expenses. Whether it’s those daily lattes, impulsive lunches out, or casual shopping sprees, it adds up fast. If you’re employing credit cards to fund this lifestyle, you’re digging a further hole with interest.
Reaching $1M by age 45 isn’t just a pipe dream. By cutting out unnecessary spending, buying smart, and maximizing your savings and investments, you can make it a reality. Start now, be consistent, and watch your plenty grow.
For more tips on smart spending and investing, check out Forbes and Investopedia.
Michael is the Editor in Chief and Director of Start Motion Media, a Studio Agency. https://www.startmotionmedia.com
