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Becoming a millionaire can seem like a pretty lofty goal — or even just a fantasy. But according to financial adviser David Bach’s book “Smart Couples Finish Rich,” all it takes is a little planning.
It might seem impossible, but you can start off by saving just $2 a day when you’re 20 or $20.55 a day when you’re 40. Believe it or not, that can get you to millionaire status by the time you’re 65.
Start Early (Or, At Least, Now!)
According to Bach, the key to getting rich is sticking to a savings and investment plan as early as you can.
So how exactly will $2 a day get you to a million dollars in time for retirement? Bach created a chart, which Business Insider recreated, to illustrate how you can build your wealth over the years.
The chart assumes you start with no money invested, and it assumes a 12% annual return. That may be a little aggressive — the current standard is about 10% — but it can give you an idea of what a few dollars a day can do.
The Key Is To Invest
The key to accumulating wealth is to not just save money but to invest and let it multiply. According to the authors of “The Millionaire Next Door: The Surprising Secrets of America’s Wealthy,” millionaires invest 20% of their income on average (and the majority of them live well below their means).
Robert T. Kiyosaki’s advice is similar in “Rich Dad, Poor Dad: What The Rich Teach Their Kids About Money That The Poor And Middle Class Do Not!,” which bills itself as the #1 Personal Finance Book of All Time (and is part of the “Rich Dad” series that has sold over 27 million copies worldwide).
Earning a lot of money won’t automatically lead to wealth. It’s how much you keep and what you do with it that counts.
It’s Not Too Late To Start Saving
Whether you are just starting to save money now or want to increase your investments (to get that oh-so-essential return!), the process can be confusing and overwhelming. Don’t give up, though.
As “The Millionaire Next Door” authors William Danko and Robert Stanley advise, financial planning takes time — but it’s time very well spent.
Need More Help Saving Money?
Finding a trusted financial planner to help guide your budgeting and investments can be a good use of your time and money. If you need help saving money on a daily basis, here’s another chart that shows you how to save $1,000 in a year based on how much you need to save each day.
Each week of the year, store away an amount listed on the chart, cross it off and voila! At the end of the year, you should have an extra $1,000 to invest.
If you’re still not sure how much you need to be saving, try this handy savings calculator.
The long and short of it: The next time you’re thinking of getting that coffee or green juice, you might want to consider setting that money aside instead — it will definitely pay off in the long run.
This article originally appeared on SimpleMost and was syndicated by MediaFeed.
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