GUT-LEVEL: Early Retirement Savings

Let’s spell it out.  Let’s point out the exact power and potency of savings, and how money turns into the Money-Machine
required to enable Financial Freedom. Doing this will ingrain it in our GUTS, and have us saving money like squirrels save nuts.

To begin, Yes, every person will utilized their savings differently. The most obvious route is to invest in ‘safe’ market tools, like mutual funds/annuities, and allow the magic of Compound Interest to multiply your money in 30 years (possibly tripling it).  You can then use that large lump of money as a Money-Machine, and rather than reinvesting the same yearly interest of 5% – 6%, you pay yourself that money every year… forever.

Then, in the last handful of years of life, that entire nest-egg can pay out in totality, as we exit our last breath on Earth… OR, we can leave a legacy of cash behind them for their families (perhaps with some ‘trust fund’ rules, so that your family doesn’t blow your master savings on expensive cars, and luxury vacations after you worked so hard to save that money for so long.)

If you save like a champ, and manage your money well, THAT IS THE INEVITABLE FUTURE OF CASH.

Some people save, and some people instead live for today only, assuming that a disaster could take their life at anytime, so just living for today seems good enough.  Many other people just find that the small pile of cash leftover after paying the bills is not enough to bother saving. For these reason, many people end up working forever, with little to show for it, and nothing left when they need it most…

As far as creating a Money-Machine through mutual funds/annuities, it’s not the only route.  Some people end up starting their own business.  Either way, the savings and investment account can become an extension of yourself, providing for your future self.  It can enable a person to do things differently, to feel things differently, and this leads to whole new platforms for making new decisions.  With no savings, people usually just don’t think the same way: they have less ‘reach’ : the thought of using money to make money never dials in, simply because the opportunity was never there.

Ultimately, one of the biggest setbacks to savings is that people don’t FEEL the power of each small amount saved along the way.  The same goes for spending, people don’t feel how small expenditures add up… that’s the point of this article, to ingrain it in our FEELINGS.

Let’s use a few salaries to gain some understanding:

$14,000 is the average yearly income of a minimum wage worker
$25,000 is the average yearly income of an adult semi-skilled labor worker
$38,000 is the average take home pay of teachers, tradesman, and many other professions

So now that we’ve seen the salaries for these professions, know that entire arms of the economy rely on getting these people to pay a business just a small percent of people’s yearly incomeThink mortgages, utility companies, cellular providers, grocers, cable companies, student loans, credit card companies… all those companies accumulate massive wealthy by skimming just a few percentage points off our income.

Examples—

Cellular Company: 4%
Student Loans: 4%
Credit Cards: 5%
Utilities: 10%
Mortgage: 40%
Grocer: 10%

Total: 73%

These companies provide you with a product or service for cash, and some of that becomes profits.  These companies THRIVE by taking a small chunk of your money, steadily through the year.  There are businesses that salivate at the possibility of taking even 1% of your yearly income, and if they can increase that to 2%, they become ultimate success stories.

Businesses are taking that small stream of income from you, and they are redirecting it into their own Money-Machine.  Basically, they are setting up Compound Interest scenarios (at least) with YOUR MONEY.  So your small amount of cash becomes a huge amount in a few years.  When the banks setup mortgages for a batch of home buyers, they will more than double their money in 30 years (for doing nothing).  If they split that money up into more mortgages, then in another 30 years, they are filthy rich.  The same goes for the cellular companies, and all other businesses.  A very small amount of money BECOMES HUGE with continual reinvestment.

Cash simply becomes like a human worker,
it does work for you, and earns money.

So, every time you save enough cash to equal a yearly salary of a minimum wage worker (or greater), these lumps of money can yield 6% interest per year TO PAY YOU.  At that point, you become the bank, grocer, or cellular provider collecting income.  Your savings becomes like a worker, and you begin collecting a payout from that worker: and that lump of money will pay you… 6% EVERY YEAR FOREVER.

With Compound Interest, your cash-workers can jump to a whole new level, before you start asking them to pay you a yearly fee:

$14,000 “salary”  = $860 per year interest = $25,800 over 30 years
$25,000 “salary” = $1,500 per year interest = $45,000 over 30 years
$38,000 “salary” = $2,280 per year interest= $68,400 over 30 years

Then when you turn on the Money-Machine, and have these lumps of money start paying you every year, a fortune is steadily left behind, for you to pick up!

$14,000 = 30 years compound interest = $80,408
6% yearly payout for 30 years = $4,824 = $144,734
added to the original lump = $225,142
(earned from a mere $14,000 investment)

$25,000 = 30 years compound interest = $143,587
6% yearly payout for 30 years = $8,615 = $258,456
added to the original lump = $402,043
(earned from a mere $25,000 investment)

$38,000 = 30 years compound interest = $218,252
6% yearly payout for 30 years = $13,095 = $392,853
added to the original lump = $611,105
(earned from a mere $25,000 investment)

THIS IS WHY BANKS AND BUSINESSES ARE RICH.
This IS the reason why.

They skim small percentages of income from you, and put that money into money-making avenues: they create Money-Machines with your cash. So much of the time, the money people pay out could have instead become part of their Money-Machine, and instead paid themselves.

If this is how businesses get rich:
how will you get rich?
“The same way”

Spending money and saving money in small increments seems like no big deal, but that concept is SO COMPLETELY WRONG: the numbers add up in a serious way.  The ultimate goal for Retirement is to grow a savings/investment account beyond $500,000, because that money can pay you $30,000 a year, which is a lot of money if you have secured your housing.

FOR MANY PEOPLE, just 10 to 15 years of serious savings could set them up for the ENTIRE REST OF THEIR LIVES !!!  This is not something to think about passively: this is an active, living idea, that must be implemented as truth.  It means that we must divert some of our income into making this a reality.

If you are reading these pages, then this idea clearly interests you – and you know the IDEA IS REAL.  Well, the reality is real too.  People are doing this.  It’s time to make this happen, which means wrapping your brain around out an active savings plan and holding onto it, like a life-boat in a vast blue ocean…

NEXT >> The SAVINGS PLAN
PREVIOUS >> CARS: The Real Cost – PART 6 : FINAL – TOTAL COSTS
All Articles: See them listed here
Share your thoughts: comment below!

SAGA can save your friends! Feel free to like and share!

Leave a Reply

Your email address will not be published.