# Want to Be a Teenage Millionaire?

Do you want to make a deal with your parents or with yourself? You can spend every dollar you’ll ever make the rest of your life, because at age 20 you’ll already be set to be a millionaire. The only thing you need to do is save \$9,300 by your 20th birthday. Nothing more – nothing less. After that, without getting into debt or touching these savings, you can spend every dollar you earn – if you choose to. And, if you also save a bit of each paycheque, it won’t be hard to reach two million dollars.

It’s the magic of compound interest and works with something called the Rule of 72. Simply take the rate of return on your investments and divide it by 72. That’s how long it will take for your savings to double. So, a 10% return doubles your money every seven years.

Saving that \$9,300, investing it, and forgetting about it, at a 10% rate of return will double your money very quickly and very frequently:

Invested by age 20:                           \$   9,300

At age 27 it doubles to:                    \$ 18,600

At age 34 it doubles again to:         \$ 37,200

At age 41 it’s:                                    \$ 74,400

At age 48 it’s:                                    \$ 148,800

At age 55 it’s:                                    \$ 297,600

At age 62 it’s:                                    \$ 595,200

And at retirement (age 67) it’s:        \$1,003,000

You could also save \$78 a month from age 20 to 67 to get the same million dollars. But that leaves 564 times you’re going to tempted to skip a month, be too broke, or forget to do it, and that risk is too big.

Why can’t every adult accomplish this? The answer is simply, because they didn’t save any money when they were much younger. The longer you wait, the less time your money has to double, and double up again. If you want the money when you’re 67 years old, but only start to save at age 41, you’ll end up with three fewer doubling periods and have about \$150,000, instead of a million! In your case, at around age 20, the money has the time horizon to double almost seven times!

It’s your call – it’s your choice. If you don’t do it, you WILL remember having read this, as you start your retirement trying to live on \$1,400 or so in monthly government pensions.

# Happy New Year – But Will This Year Be Any Different?

If you haven’t made many or any New Year’s resolutions – congratulations. There’s a good chance that those who have, are half way done breaking them in the first week anyway. It’s a bad time to make them based on societal pressure. But you do need some goals, at least for your financial life.

Write down some financial goals for this year. Whether you start them this week or next month is up to you. They’re goals and a game plan and not throw-away New Year’s resolutions. However, your goals have to be in writing. To paraphrase a quote from Larry Wiget: Nobody ever wrote down a plan to be broke, overweight, or lazy. Those things are what happens when you do not have a plan.

This year, write at least five benefits with each -that’s the part which will motivate you to stay on track. For instance, if your goal is to be credit card debt free, it’ll be pretty easy to come up with five huge benefits that’ll come as a result: No more monthly payments, it’ll be like getting a \$300 raise in not making those payments. It’ll save you x amount of interest a month. It’ll boost your credit rating that’ll get you lower interest rates on other borrowing, frees up all that money to now go into savings or towards another debt that’ll get cleared off a lot faster now. That’s six easy blessings right there.

Things only change when you change, and not when the year and the calendar changes.

A huge 2014 gift to give to yourself is to set up a savings account for your annual bills: Add up your property tax, insurance, what you spend on Christmas, your vacation and whatever bills you only have once a year. Have your credit union take one-twelfth of it out of your chequing account automatically and transfer it to this new savings account. You can’t imagine how much financial and debt stress that’ll relieve when you’ve always got the money for these.

The gift of not being stupid and thinking before buying or signing: That so-called free cell phone is over \$1,000 when you’re forced into a two-year contract. Get a free TV if you just sign this three year contract. Stop and think that the ad should say: Get a \$290 TV when you spend over \$3,000.

A gift that will keep on giving for more than 60 years: Teaching your kids about money and savings. But it’s about what you do, not what you say. Start today away and give them three jars or piggybanks: Whatever money the receive goes equally into the three jars: One for saving, one for giving, and one for spending. As they get older you can change the distribution, but start somewhere and sometime soon!

You’ll only achieve your goals if you have a written and specific plan, and if your drive to achieve these goals is stronger than your excuses or thoughts of failure.

What I wish you for 2014 is that you choose to opt out of the North American way of life: Spending money you don’t have, buying stuff you can’t afford, to impress people you don’t really like.