Explain what young adults can do to become better savers? What will you do in the next five years to secure the future of your retirement?
According to Robert Kiyosaki , the co-author of Rich Dad Poor Dad, “it’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” Meaning that you can make all the money in the world, but if you don’t save and manage your money properly, then it’s pointless to make so much money. In other words, it’s not about how much you make, but what you do with your money. The average American makes a daily wage of $100 dollars. Globally, the average annual income is $10,000. Therefore, the global average income in 92 years is $1,000,000. In today’s economy, the millennial generation ages 18 to 34 must save at least 2.5 million in order to have the same standard of living retirement that past generations did. Today’s youth must therefore save more than this amount in order to secure their retirement. In order to be able to master their money, first the youth must learn how to manage their money.
The first step that youth must take in their road to financial stability and a secure retirement is to establish a positive mindset towards money and saving. This positive attitude toward money and saving will give them the self-esteem and incentive necessary to make the financial decisions that will give favorable results.The overall key point is to stay out of debt and save as much as possible. As of 2012, the U.S. has an estimated 122.l trillion of unfunded liabilities, meaning we are in heavy debt. As young adults we can make a good start of avoiding debt by making it a habit to pay our bills on time. We should develop a good credit score which can be developed by making good spending decisions and paying your credit card bills on time.
The main goal is to maintain your credit score above 750, so that when you need to take a loan out from the bank, they will be more likely to lend you the money. It is extremely important to have little to no debt because if one makes a mistake that affects his/her credit score, then it may take as much as seven years to fix it and restore your credit score. So how can young adults become better savers? They can create a stable saving plan that they can follow for the rest of the years they work. The ideal plan for today’s’ youth is to save $450 a month for 40 years at 10% interest. Following this plan will lead to a secure retirement.
In order to secure my retirement, I will be sure to get an early start on saving. The ideal age to begin a stable saving plan is 20. The earlier you begin saving, the more you will save and the more ensured your retirement will be. Another thing I will do is maintain a proper balance between spending, saving, and giving away. Saving and spending are both just as important as giving away your money, even ifjust the tiniest amount. A man who has a mindset of poverty will try to keep all of his money to himself because he believes he will not get more money later on. Meanwhile a man who has a wealthy mindset will make sure to give away some of his money in donations to charities, scholarships, etc. because he knows and affirms that he will obtain more money later. As long as I find productive forms of giving away an amount that is proportionate to my income then, I shall have a successful balance. Another key point to keep in mind is that money doesn’t grow quickly. Therefore, I will save my money knowing that if I continue, then I will see a steady growth in my money for retirement. Ultimately, the key steps of successful finances are to watch my credit score and continue saving and investing.