What’s the fastest way to $1 million? The author of a famous book The automatic millionaire achieved this goal by the age 30. And he says you can do it too.
He offered the blueprint to help almost any person reach a 7-digit status by automatic means. Here are few tips we can look at.
Pay yourself first – Automatically.
Its starts with paying yourself first. Signing up for TFSA/RRSP plan for automatic savings is one that needs to done if you haven’t done so. That little effort can change the course of your future.
Have some portion of your savings automatically moved to savings account from chequing account for emergency needs. As a rule of thumb it can be anywhere from 6-12 months of your fixed expenses.
Save an hour a day of your pay for yourself.
Ideally, you can hold onto at least one hour a day of your income, its approximately about 12.5 percent of your before tax income, to save and invest. Remember that if you have an employer RRSP contribution matching plan, you can end up setting aside around 15 percent just by participating the match. Many employers will match your contribution upto a certain limit (often 3 to 6 percent).
Starting with a Little is better than starting later.
Rome was not built in a day. You work your way with small targets. Saving is very similar”. The key is to start early and making it a regular habit.
The best way to do it is by making an online account and increasing the contributions proportional to the increments you get. There are several apps which can help you track your expenses and help you save a lot once you become aware of your spending habits.
Pay your bills & debt payments through automatic transactions
Call all your credit card issuers and start making the bills and payments due dates to be the same or just a day after you get paid. If you’re carrying debt, the best idea is to make those payments automatic and add more money toward the balance so you can pay it off quicker. The priority is to get rid of the higher-interest balance first. Or, if you prefer to pay the small balances first, that completely depends upon your choice. This can keep you motivated.
And keep in mind to pay it back!
Align your values with your spending.
“Sometimes, there’s a huge disconnect between values and how you spend your money.” When people say they don’t earn enough money to save and invest, he says, it’s often because they haven’t taken a deep look at where their money is being spent. There a Latte Factor,” which you need to find and it refers to how quickly seemingly small expenses, like a daily latte, can add up and keep you from saving toward financial goals that really matter to you. “It’s not about not drinking coffee, or quitting something up that you really like to do but its about looking at where your money is being spent. Hence, you may realize that’s its not very difficult to have enough to save.”
Good luck!
