Sunday, July 01, 2007
Today marks the beginning of My Wealth Builder's Retirement Saving Challenge.
As a reminder, here are the posts to help one prepare for the challenge.
Retirement Saving Challenge Description - Here is an overview of the retirement saving challenge. Briefly, it is an honor system challenge from July 1, 2007 to December 31, 2007 to help one save for retirement. My Wealth Builder will publish the saving targets, daily savings amounts and target progress to help people track their personal results.
Setting a Goal - Deciding how much to save is important to do. This post on setting a saving goal can help one define a specific number for one's own situation. Our target to is to save 20% of my salary and achieve next egg of 20 times my salary.
Creating Environments and Behaviors - Making a saving a habit will help achieving one's goal easier to do. My personal approach is to make saving a top priority, to eliminate "unnecessary" spending, and to "pay myself first" automatically.
Daily Saving Targets - A goal of 12 times one's salary is very big, almost intimidating. I find breaking down long term savings goals to daily amounts can help. Daily saving targets also make the importance of starting young very clear.
Choosing a goal - Should one save 12% of one's salary or the amount needed to get to a next egg equal to 12 times one's salary? The two methods provide different answers for each age. Which goal to choose depends on one's age. Starting at the lower of the two numbers and work towards the higher number can be a good approach.
Finding the Money to Save - Besides buying only what one needs, and paying oneself first, I would add using other people's money.
The Power of Compounding - Compounding and time are one's best friends in saving for retirement. Save early and often and find a good investment for your savings. Remember, the stock market has returned an average 10% annually since 1926.
All that's left is for us to get started. Good luck! Ready, set, go.
For more on New Beginnings, check back every Sunday for the next segment.
Photo Credit: morgueFile.com, Michael Connors
This is not financial advice. Please consult a professional advisor.
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