I need every penny I make NOW. If I put away $1000 every year until I'm 65, and I get REALLY, REALLY lucky with my investments, I "might" have $60K by the time I'm 65. That would give me $6000 a year until I'm 75....then what do I do? If I'm going to have to work until I'm 75 anyway, then hope I die before I hit 80....what's the point of investing money I can use NOW?
2007-01-28 03:50:46 · 6 answers · asked by butterfly w 1 in Business & Finance ➔ Personal Finance
How much you can make depends on how long you have to invest and where you put your money. It would help to know how old you are now. Especially if you are younger, you have time on your side--the longer your money is invested the more significantly it grows.
The point of "investing money you can use now" is that the value of the money you invest will be worth a lot more later than it is now. I'll bet if you take a close look at what you spend, you will find lots of ways that you can save money now to put away for later--i.e. coffee at Starbucks, magazine subscriptions, extra cable channels, etc. Also you should assume that as you get older your earning power will grow and you'll be able to put away more than just $1000/year.
There are a lot of resources you should look at for investing and how your money can grow. Your assumption that if you have $60k when you are 65 it will only give you $6000 a year for 10 years is incorrect. If the money is invested and is earning a return, you'll have a bit more than $6k each year.
Here are some resources you can look at:
http://financialplan.about.com/cs/investin1/index.htm?terms=retirement+investing
www.investopedia.com
www.fidelity.com
www.vanguard.com
2007-01-28 04:09:29 · answer #1 · answered by SwimsALot 2 · 0⤊ 0⤋
The sooner you start, the better off you will be at retirement.
You need every penny you make now????...I doubt it.
Buy a little notebook, and write down every last item you buy, no matter what price, and list the item and cost. Do this for 3 months, don't change your spending during this time.
At the end of 3 months, go through your book and on a separate peice of paper, list the items and costs for the things you REALLY DIDN'T NEED, for living and enjoyment of life...be fair, buying a widescreen TV wasn't necessary for living or enjoyment of life. Your list of non essentials will give you a basis for saving. Do you know how much you can save by having coffee at home in the morning instead of going to Starbucks.
If you want a better retirement, Start Now, and live simple and be happy.
2007-01-28 04:11:04 · answer #2 · answered by bob shark 7 · 0⤊ 0⤋
First, you don't list your age. Second, you make a lot of weird assumptions, such as you'll never financially be better off than you are today to save money.
If your employer offers a 401k, make sure you are enrolled and investing at least what your employer matches - don't ever pass up free money.
Also, what will you do with the money NOW that will help you later? Are you investing in real estate? That is a smart move and would be understandable. Are you buying a car you can't afford? That would be ridiculous. Think long-term and get a more positive approach to your finances and career goals.
2007-01-28 09:29:05 · answer #3 · answered by Sassygirlzmom 5 · 0⤊ 0⤋
your numbers are goofy. Although we don't know how old you are...it only takes 24 years to get to 65k by putting in 1k a year. if you are 41 or so then you can't draw social security until age 67. If you do work and contribute 1000/year until 67 you can expect to take out 6,000/year until the day you die. Assuming 8% annual return your 6,000 will be the earnings on your principal.
And, if you're younger than 41 it's all the more important to begin now. If you're 27 and you put in 1k a year until 67...you can expect to get back 20k a year until you die (note I don't say when you'll die...doesn't matter!) Put off retirement for just 3 years and that number goes up to 28k a year.
Make sure you understand compounding effect and the market...My numbers are conservative.
2007-01-29 09:08:22 · answer #4 · answered by digdowndeepnseattle 6 · 0⤊ 0⤋
I illustrate the benefits of saving even a little bit often and early. For the details visit...
http://www.genxmillionaire.com/?p=69
Age does matter, but it is NEVER TOO LATE to save for retirement.
2007-01-28 05:05:22 · answer #5 · answered by Gen X Millionaire 2 · 0⤊ 0⤋
How old are you? That is really a key determinant
2007-01-28 04:06:19 · answer #6 · answered by babalooie21204 2 · 0⤊ 0⤋