WHAT ARE EDUCATION GROUPS

Is it hard to get rich? Not really, if you’re young.

Its fun to play with financial calculators and see what might happen.

Assume you have just graduated from college, are about 22 years old and I just started your first real job. If you put $100 a month in an IRA that grows at 10% a year, you will have about $865,000 at age 65. 10% a year compound growth is about what you should exect if the money was invested in a no-load S&P 500 Index Fund.

So for about $23 a week or $3.30 a day you would be close to being a millionaire.

If you contributed the full $4000 a year allowed right now to an IRA (rising to $5000 in 2008), you would have $2,600,000. For about $11.00 a day, you would have a small fortune.

• If you didn’t want to take a chance with the stock market because it goes down sometimes, you would still have over $600,000 if you could get a 5% return.
• If your grandmother leaves you $10,000 in her will and you invest it for the same 43 years at 10% without adding another cent, you’d also have over $600,000 if you placed it in a tax sheltered account.
• Time and the power of compound interest are on your side. So if you’re in you twenties and want to get rich, do whatever you have to scrape together that IRA contribution. Every day you procrastinate is another day your money is not working for you.

However, most people in their twenties need the money for more important things, like new cars and HDTV’s. You also have school loans to pay, children to raise and the new mortgage to pay off. But if you prioritize your life and stick to a budget, $11.00 a day is doable, although you might have to scrimp here and there.

• Consider that most people are spending their lives paying the freight for borrowing other people’s money. If you save and invest, other people are paying you to use your money. It’s a lot more fun to see your money working to help you get rich than.
• having to work yourself.

Think about the effect expenditures have on your financial future. If you bought a late model used car instead of new one, you would probably save $10,000 or more depending on the model. That $10,000 as noted above, would grow to almost $600,000 by the time you’re 65 if invested in tax sheltered accounts.