2 Steps to Building Your Own Pension
Take a good look a the financial world around us. Go on, it’s not a very pretty sight for a lot of people.
I’m a self-employed entrepreneur which puts me about as far as you could imagine from having a pension. It also means that the people I employ as contractors are in the same boat, and they needed a system to learn financial maturity as fast as they could.
If you are in a similar position, then keep scrolling as I share some of the basics of what they now do.
Start as early as possible.
The most important variable in investing isn’t the rate of return, or the amount of money you put in, it’s how long you have been investing. The longer duration you have to grow your investment, the greater the effect Compounding interest has.
Here’s a quick example.
$300 per month at 8% for 10 years vs. $100 per month at 8% for 20 years
Starting later in life means that you are constantly playing catch-up with a person who started earlier, with a much smaller amount of money invested monthly.
Just. Start. Now.
“I can’t afford to start investing, I’ll do it when I can afford it.”
Guess what… you won’t! Have you ever heard the analogy that a goldfish will grow to the size of the tank they live in (and I know, it’s not accurate in nature, but it’s a great parable)? Your spending habits will also grow to use up the amount of income that comes into your wallet.
With this in mind, always put something away, and take the power away from yourself. This needs to be done on an automated schedule so you don’t see the money sitting in your account. If you see, you’ll spend it.
It doesn’t need to be huge money, it just needs to be something. Now.
Your future will thank you for it.
Thanks for reading! If you want to learn more about how an entrepreneur builds financial freedom, come check out my website: www.jaonhillman.com
