The First Step To Becoming A Millionaire: Pay Yourself First
Wealth comes with time. Everyone thinks that putting a few dollars away each day will never amount to a large sum of money. “The Power of 72” articles shows that you can become wealthy by investing a small amount of money each day. The fact is that most of us have a problem putting a few dollars away each day. That is unless you have it automatically invested from either your paycheck or bank account.
Most people will find that money that they never see is never missed. If you have a retirement plan at work where you can automatically have a deduction taken from your pay check, by all means, do it. This way you will never see the money and it is automatically invested for you on a paycheck-by-paycheck basis. If you are investing it in a retirement plan, the money you contribute grows tax-free until you take distribution, which can save you thousands of dollars by delaying paying the taxes on your investments.
If your employee does not offer an automatic deduction for a retirement plan, you can start one on your own. Your bank or financial advisor would be happy to help you with setting up one of many IRA’s. Once set up, you can have a set amount of money to be taken out of your bank account each week and invested in an IRA.
With both employee IRA’s and also IRA’s you set up yourself, your money can grow tax deferred or tax free, depending on the IRA, up to the time you start to withdrawal your money. There are certain rules you must follow, but the most important on most IRA’s is that if you need the money before you reach the age of 59 ½ years of age, you could be penalized for an early withdrawal.
The best advise I can give for you, as a person who is going to save and gain wealth is to start saving today and have the monies automatically taken from your salary or bank account. This allows for an automatic savings and the money invested will never be missed. As time goes by, you will be watching your money grow and you will want to increase the amounts you invest. With time and a small amount of savings, you to can become a millionaire.