Most of us want more…. “One million dollars should hopefully do it” is what we tell ourselves. It’s that magic number that pops into our heads. Let’s assume this is your magic number that allows you financial freedom to go pursue your dreams. So how do we get there?
Most of us think we need to make more money, or we need better investment returns. This would clearly help, but it does cause some issues;
- You either do nothing because you feel you can’t earn more money or get a better return, or
- You work your backside off or take on big risks that can cause big losses
What if we told you that you didn’t need to hit a home run, and instead all you need to do is play the game and follow this simple equation;
Cost Hack + Invest + Time = Outcome
Let’s work through it…
- Cost Hack – Find yourself $10 a day. This is a reasonable amount of money for most of us to muster without causing financial stress. We love cost hacking for our clients & encourage you to try getting better deals on your everyday expenses, or simply take your lunch to work.
- Invest – Take the $10 you’ve now saved and invest it. If you want to become a millionaire you’ll likely need to invest this money into growth assets like shares and property, and make sure you use a low tax environment such as superannuation (the higher the taxes the lower the net returns). Automate this process.
- Time – Time is your best friend because all the money you invest will begin to compound and grow exponentially. Einstein referred to compound interest as the 8th wonder of the world. Google it as it's important to understand this concept.
Investing $10 each & every day from the age of 25 until age 65 should net you well over $1,000,000! If you want more, start earlier. If you’re older and don’t have a time machine you’ll need to cost hack more than $10 a day. That’s it. Yes, it’s that simple.
As you set this all up it’s a good idea to take time out to think about why you want to be a millionaire. How would this change your life? What would you do differently each day? How much money do you really need? Maybe you don’t need $1,000,000? You’re now on your way to being your own DIY financial planner 😊
At Naked Wealth we are all about helping our clients get the balance right between funding a great lifestyle today whilst ensuring financial freedom tomorrow. Please get in touch if you wish to discuss this article or how to make smarter money decisions so you can live a better life.