If you are a student, you have one of the greatest assets available to you … time!
It means that you can succeed with a ‘get rich slow’ program (whereas, most of the rest of us can’t … not enough ‘runway’ left).
Just how important is ‘time’? Just take a look at this example taken straight from the Investment Company Institute‘s web-site:
The following graph shows three investors, each of whom invests $1,000 a year until age 65. However, one begins at age 25, investing a total of $40,000; one at age 35, investing a total of $30,000; and one at age 45, investing a total of $20,000. Each earns 7 percent per year and, for purposes of this illustration, the effects of taxes and inflation are ignored.
The Power of Compounding
Source: Investment Company Institute
So, if you are happy to ‘get richer than most people but slow’, here’s a super-quick 4-step program for you just because you have time on your side:
1. Get debt free … pay of those credit cards and student loans (if interest rates are super-low on these AND you like a bit of risk, keep the loan and buy and investment property instead) … look at the debt snowball for a neat debt-reduction strategy?
2. If you are hell-bent on investing in stocks stick your money in a low-cost Index Fund (it’s what Warren Buffet suggests) … if you prefer owning direct stocks, then read a book called Rule # 1 Investing by Phil Town.
3. Try and save for a deposit on a rental property (or your own home … but, it’s better to rent/own than own/own) – both real-estate and finance is cheap right now; buy and lock in for 30 years.
4. If you want to accelerate your results (i.e. ‘get rich quicker’), you need to focus on accelerating your income … start a part-time business (for you, Internet-based might be ideal!?). IF you make money, put at least 50% of it towards 1., 2. and 3.
If you do this early enough … then you just may be able to kick-back and enjoy the ride!
