One way to decide to be wealthy is to spend 10% less than your income and put those dollars to work for you. Through the miracle of compound interest they continually gather additional dollar friends to serve you. But what if you decide to spend 10% more than your income? Alas, money you borrow then works against you and robs you of your wealth. The miracle of compound interest that could have been your friend becomes a compound plague with no mercy.
The Power of a Simple Decision
You decide to spend 10% less than you earn and put those dollars to work. Money earned from working 37 years at an average of $40,000 per year = $1,480,000. Lifetime earnings from the dollars you put to work for 37 years at 12% compounded interest is $2,352,000. Total lifetime earnings = $3,832,000.
You decide to spend 10% more than you earn and borrow the difference. Money earned from working 37 years at an average of $40,000 per year = $1,480,000 but $200,000 is lost due to average debt of $30,000 at 18% interest, reducing total lifetime earnings to $1,280,000 or less.
That is a difference of over $2,500,000. This is not the result of being extraordinarily lucky and winning the lottery. It is the result of making the simple decision to be wealthy or not. What is your decision?
There are many ways to spend less. One of the best is to avoid mindless spending on things of little worth. A good way to think of it is every dollar you spend now is taking five dollars out of your future pocket. Another is to take care of your things so they last longer. You could also shop for better prices or buy in economical quantities. List some of your own ideas and remember your reward could be $2,500,000 or more:
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Copyright 2016 Brent Evans – Learning Success