Your wealth isn’t measured by the number of zeros tacked on the end of your paycheck — it’s measured by how much you save and invest over the long haul.
The good news is anyone can put money aside and let it accumulate.
“Money comes to you when you are ready for it,” explains entrepreneur Lewis Howes, who went from cash-strapped and living on his sister’s couch to running a seven figure business in a couple of years.
You just have to commit to paying yourself first, even if it’s a seemingly insignificant amount at first: “Start creating auto payments to your savings and investments early on, even if it’s $10 a month,” Howes tells Business Insider.
Thanks to the power of compound interest, even $10 a month can get you pretty far — particularly if you start saving early — but it’s important to continually challenge yourself to save more.
“Each year increase the auto payments to something that feels uncomfortable, and stick with it,” emphasises Howes.
The great thing about making automatic contributions — whether that’s into a retirement account or other investment platform — is that you’ll never see the money. If you never see it, you’ll learn to live without it.
As for where to invest, a good starting point is your employer’s 401(k) plan or other retirement accounts, such as a Roth IRA or traditional IRA. Check online to see if you can set up “auto-increase,” which will automatically increase your contributions every year.
If you get to the point where you have extra money left over after maximizing your retirement funds, don’t hesitate to put that to work. You can research low-cost index funds, which Warren Buffett recommends, and look into the online-investment platforms known as robo-advisers.