Save your way to a fortune? I don't think so …

You’ve read the blogs … you’ve bought the books … you’ve talked to your financial advisor (your wife).

They’ve all told you that you need to pay yourself first! So you are … 10% of your gross salary !

You’re putting some aside in your 401k (with some employer match) and you have a little change going into the cookie jar next to your bed.

Great!

You’re already doing two-and-a-half times better than what CBS News calls ‘most people who only save 4% of their salary”.

But …

… it won’t make you rich!

It will stop you from being poor and may even fund a retirement if you start early enough and are willing to take a 30% pay cut.

The problem is, you can’t just save yourself to the retirement of your dreams on the average salary … you have to at least earn more and save most of the extra.

Look at it this way … the amount you can save is limited …

… limited to less than 100% of your salary, and for most people, limited to something between 0% and 20% of their salary.

But, the amount you can earn is only limited by your imagination and your capacity for hard work.

Here are some examples of ways that you can increase your income:

- Change jobs (maybe)

- Work longer shifts (yuk)

- Ask for a payrise (why not?)

- Take on a second (third?) job (horrible)

- Join an MLM ‘opportunity’ (do your homework carefully!)

- Renovate some houses (now may be the time to get back in)

- Start trading some stocks (better know what you’re doing?!)

- Start a business ‘on the side’ (my favorite!!!)

Whatever you choose: Start Small … Finish Big!

The point is not how YOU should do it, the point is you CAN do it … if you are prepared for some hard work and sacrifice now for a better future. Are you?

If you keep paying yourself first at only 10% of your current salary in your day job, and 50% of the additional money that you earn (after paying off debts), THEN …

… you just may retire RICH!

Let me know if you think this can/can’t work for you …

A retirement dream – Australia

I read an article from the Epoch Times in Australia recently. Apparently, Australia is the country most people around the world would like to live in 20 years time (presumably, this means when they retire).

So, how well does the typical Aussie live in retirement?

AXA (the big French multinational insurance giant) questioned workers in 26 countries and here is how the Aussies perform:

The average retired Australian EARNS $1917 a month.

The average retired Australian SPENDS $1437 a month.

By my reckoning, that means that the average Aussie is living an idyllic retirement lifestyle of $17,000 a year (I couldn’t buy much more than a Big Mac and a Starbucks Latte a day for that!) …

… and, for the really big yearly shindig, they have a whopping $5,800 a year spare to spend on holidays, cars, boats, cigars! By the way, these are Aussie dollars, so take off 20% to convert to US.

The concept of an ‘idyllic retirement’ in Australia (or the US, or most Western countries) takes a lot more money than that … unless, your only passion is surfing every day!

So how do financially astute Americans compare ….

… pretty similar: living off $27,000 a year in retirement, and somehow ‘saving’ $11,000 for all those fine things the Aussies are also chasing!

My question is this?

When you calculated your Number, was it anything like $30,000 or $40,000 a year? I bet it was MUCH MORE. And, that’s the problem with these surveys … they assume that you can (or want to) live off just 70% (or even 100% or 120%) of your current salary when you retire.

Do you?