Last week I wrote to you about getting rich slowly. This week I want to show you how you can use a simple savings strategy to make it a reality.

Here’s the thing… as humans we don’t like change and we don’t like to give things up. Therefore, when it comes to saving money it’s important to try and find a way to do it that doesn’t feel like it’s hard.

The way to make that happen is to not focus on trying to save hard right now. Instead, focus on saving more tomorrow.

The secret is to save your future pay rises.

Let’s look at an example…

Catherine is a 35-year-old earning $65,000.

Up until this point she hasn’t been saving anything and has invested nothing (in reality she will have some superannuation, but let’s exclude that from this example). Let’s assume that each year she gets a 3% pay rise.

She can make herself very wealthy if she starts to save half of her annual pay rise and invests the rest.

If every year, when she gets a pay rise, she continues to save half of that pay increase and invests it earning a return of 8% per annum, then by the time she’s 65 she will have created a little over $1.5 MILLION in wealth! (Note: it’s virtually impossible to save your way to wealth… you need to save and invest, but you can’t invest without savings.)

In this example, there is no consideration that Catherine might get promoted and move to a higher pay level, this is based solely on her continuing to work in the job she’s already doing. If she does get a couple of promotions along the way or was already earning more than $65,000 a year at age 35, then that figure of $1.5 million only gets bigger and bigger.

Imagine if Catherine has a partner (or she finds one in the future) and she and her partner both use the same strategy and combine their resources!

Hopefully you’re starting to see that real wealth is achievable for almost everyone in Australia if they get started sooner rather than later and use sensible strategies. There is no need to take silly risks with your money and chase quick riches. There are no get-rich-quick schemes that work… but there are get-rich-slowly-but-surely methods that do!

People become wealthy by learning and implementing simple things that work. However, things that are simple are not always easy. As Simon Sinek says, “Give someone responsibility and they will do their best. Make them accountable and they will do even better”. This is where having an expert working with you can make the difference.

If you think you could benefit from having a coach guide you along the journey to financial freedom, then I would love to help. Get in touch to organise a FREE financial health check if you would like to explore your options.

Cheers,

Daniel