You can NOT save your way to financial freedom and I’ll prove it to you!
People come to me because they feel stuck in their lives, and they want to know what exactly I did to become a multi-millionaire who is now traveling the world and enjoying life!
When I talk to people at my live events, they often tell me that they worry about retirement. They often say that they tried to save up money for retirement, but that it doesn’t seem to be enough.
I understand. Trust me, for many years I fell for the same trap.
You have heard it: “You have to spend less money than you’re making. Live below your means. Save money every month.”
And many years ago, when I was still working for IBM, I did exactly that: Pinch a penny and save as much as possible… HOPING that I could retire as a millionaire.
You know what: That’s bullshit! They have been lying to you.
Here’s the proof:
Check out this website to calculate how much you have to save to retire “rich”
It’s a compound savings calculator. You can enter a year, your starting amount, and let’s say that you start with $10,000.
Let’s say that you have 20 years to save. The rate of return is 2%. Because honestly, that’s what you’re getting right now.
If you’re investing in CDs or if you’re putting it in a savings account 2% is all you get.
Let’s say that you allow contributions of $500 every single month.
Where does this get you within 20 years?
Your estimated total is a $162,218. After 20 years! That doesn’t get you anywhere!
Can you retire on $160,000 dollars? Of course not!
So what if the rate of return interest rates will go up to 4%? Let’s say instead of contributing $500 a month, you’re really pinching a penny hard and you are saving $1,000 a month.
It gets you two not even $400,000 in 20 years! Now let’s say that you start maybe with $50,000 you can play around with this calculator.
As you can see even if you save for 20 years and you put away $1,000 a month, it only gets you to barely half a million dollars.
I will show you how much you WOULD have to save to meet your goals. And you will be shocked.
But first of all, let me ask you this:
Have YOU ever heard:
- “Save your money so that you can retire rich?”
- “Just stop drinking a latte every day and you can retire rich?”
Let me show you what THAT would do for you.
So now let’s take a look:
How much would you have to save to retire rich?
On average, a latte costs $6. So this makes $180 a month if you drink it every day. Let’s see if you start with ten thousand dollars. You would only have $87,000.
Well, it is obvious that such advice will not work.
Now, let’s take a look at how much of what you have to save to retire rich let’s use a different calculator (https://www.dinkytown.net/java/savings-goal-calculator.html).
For example, want to have a million dollars and then you have 20 years to save for this.
Let’s say that you currently save $50,000 and then you can put away an additional $200 a month with an expected rate of return of 4%. You could reach your goal in 57 years.
You would have to save $2,439 to only get to a million dollars assuming that you have 20 years. If you only have 15 years left then you would have to save $3,707 per month to get to your goal.
Is this realistic? Of course not! That’s why I’m saying you can’t save your way to retirement.
Before I show you what you CAN do to retire as a millionaire, let’s talk about another problem:
Let’s say you have saved $50,000. And now your car breaks down and you need to replace it. Or something bad happens and now you’re sitting on a bunch of medical bills.
Or you’re getting divorced and have to start over. It happens to 50% of married couples! Or one of your kids needs your help.
Emergencies happen, and you have to tap into your savings.
What will happen now? You have to start over.
It is obvious that you can’t SAVE your way to financial freedom!
So what do you do instead?
For me, there are only 3 ways to make a lot of money:
- Trading stocks and options
- Investing in real estate
- Building a successful business
I do all three, and my favorite is trading stocks and options, and here the 3 reasons why.
Reason Number 3
When you want to invest in real estate OR building a business, you need a lot of money. When you invest in real estate, you have to bring 20% of cash to the table.
And if you want to invest in a $250,000 home, you have to bring $50,000 in cash!
And if you want to open a business, you probably have to invest $100,000 to get started… IF you want to be successful.
When trading, you can start with as little as $5,000.
Reason Number 2
When trading, you don’t have to rely on other people. All you need is a computer.
There are no employees, there are no customers, there are no vendors… and there are also no annoying tenants who trash your house, there are no busted ACs and water heaters.
You get the point.
I love that because trust me: I don’t like talking to people!
Reason Number 1
When trading, you can trade anywhere! May it be at the beach, mountains or other places where you want to be.
You will have plenty of time to do the things you really love! To make a long story short, I believe that if you want to retire as a millionaire, you must find a way to make more money.
In my opinion, the only 3 ways to make a lot of money are trading stocks and options, investing in real estate and building a successful business.
My personal favorite is trading stocks and options, and now you know why.
One thing is for sure: You can’t save your way to financial freedom!