Setting Yourself Up For Financial Success
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And, start while planning for college!
You're most likely wanting to go to college in order to be successful down the road in life. Well, an education is great, but it isn’t how you guarantee a wealthy future. If you are starting from scratch at a young age, you will want to set up a financial plan to meet your goals in life. The truth is that anyone can do this regardless of education level. You just have to be committed and stick with the plan you are about to make. Keep reading!
Breaking it all down
You need an end goal. Are you wanting a nice retirement (you better be) or are you wanting to be rich before retirement? Well, both are possible, but you need to open a ROTH IRA and you need to do it this week in order to be rich by retirement. If your goal is to be swimming in money by age 45 then you need to commit to more than just maxing out a ROTH IRA. We are going to focus more on the retirement side of things because it is totally doable. The key to getting rich sooner is simply to put way more into mutual funds that follow the S&P 500. The average return for the S&P is 12% (Ramsey) and this means you can be a millionaire at retirement age if you max out your ROTH IRA contributions yearly. Heck, you can be a millionaire even if you just put $250 a month into your ROTH starting at age 20. You may be asking, what in the world is a ROTH? It is a tax saving retirement account you can get outside of employment and will help you save money on taxes when it is time to pull money out down the road. I will link to one of my other articles if you want to get more into this topic; How to Pick a Mutual Fund.
Why do this?
Let’s look at a list of reasons to start investing at college age:
- Regardless of how successful you are in life after college, you will retire a millionaire.
- You know you can pursue your passions without worrying about retirement if you save following a simple plan.
- You will know you have a life plan while all your friends are wandering in the wilderness.
- Let’s face it, you know you should do it.
Regardless of how successful you are in life after college, you will retire a millionaire.
There is one more point to make about success and financial freedom. You want to avoid using credit cards and loans as much as possible. Everyone knows they should keep their debt to a minimum, but this is especially true for college students who may be tempted to sink hundreds of thousands of dollars into a college education. There are many ways to save on college and it is a key to your financial success. I wrote an article on this very topic; Five Ways to Save Money in College. Getting an education is a great thing but you don’t want it to drag you down. You want your degree to be of help to you in life and not a regret. If you do use student loans, make sure they are federal direct loans only. These can be forgiven in time.
The key to being wealthy isn’t a college degree, it is good planning and smart thinking. A degree is a way to expand your knowledge and broaden your abilities. Retiring wealthy simply takes saving from a young age and sticking to the plan. This is something you need to do more than almost anything else. Start saving now and save regularly to set yourself up for financial success!
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