Dear beautiful people,

We only ever hear what we are ready to hear and there is no way of knowing when or why a certain life lesson lands for us at a given time.  It is my hope that what I am about to say lands for you right now and you take immediate action. No, it does not involve a sales pitch to buy something from me.  It is straight, honest, compassionate advice you may have heard before and which may at this time land for you. Money talk is something that rarely happens in our culture and we need to change that.  Here’s the golden advice that WILL improve your life path:

No matter what your age, every single month, you need to put some amount of money away into a retirement savings account.

Time is real and you can make it work for you.  You do not need to make a lot of money to have a lot when you are in your 60’s.  If you save $20 a day starting now, (which you do have) you will save $7,300 a year.

If you saved $7,300 a year in ten years you would have- Seventy-three thousand dollars.

That is what you would have if you put $20 under your mattress every day for twenty years.

But! If you put that money each year into a retirement fund that earned interest over time (either a Roth IRA or a 401k) you would earn at least (but probably more than) 10% interest on that money. 10% interest a year on $36,000 equals: $692,924.00

10% is less than what the stock market has averaged since 1926.  So it is likely you would earn more than 10.

There is no way you have $692,924.  And you may not even have $7,300.  But what you do have right now is $20 a day, and time.

People do not talk about money in this country.  Why? I have no idea.  But we need to start talking about it.  You have likely been trained to tune out and gloss over words like “Roth IRA” or “401k” or even “retirement.” which means that the concept of retirement is not a reality for you.  The thing is, you are getting older.  You can not work forever.  And if you spend all the money you earn from working, when you stop working you will not have any money.  You know how when it is warm out, we don’t think to bring a sweater for when it will get cold later?  Please.  Take care of yourself in your later years by investing in savings now.  Seed money grows over time.  Put away small amounts starting today.

If you can hear me- do this thing now-

Get online and set up a reoccurring transfer of $20 a day from your checking account into a savings account.  (See about savings accounts in a minute)

Make this daily transfer automatic so that you don’t think about it and the money leaves your checking account and is put out of sight.

You may be afraid to do this because you may be living close to negative funds at this time and struggling to keep your account in the positive. But you can do this.  If not $20, then $10.  And if not $10, transfer $5 a day into a savings situation.  $5 is what you paid for a cup of coffee.  You have $5.  And you have time.  So use time, starting now.  Make it automatic. It sounds scary and expensive to set up auto withdrawals daily, I know.  But you can do it.

So there are two things you need to do to establish a secure future:

  1. set up a retirement account as early as possible and pay into it the maximum amount possible every year. Roth IRA’s allow you to put in $5500 a year.  That’s about $450 a month.  Do what amount you can, and aim to get that amount to $450 as soon as possible- every month.
  2. set up a savings account where you put away some amount of money every day.  If not $20 then $10.  If not $10 then $5.  Something.  Every day.  You DO spend this money.  So just spend it on yourself instead of the coffee or the grubhub or the uber.

News about savings accounts…

Banks are no longer a smart place to have a savings account.  They pay pennies of interest annually.  It is baffling but very real.  Credit Card companies have amassed enough power now to behave like banks, but better.  Credit card companies are now also like banks and they offer the highest interest rates on savings accounts available.

At the time of this writing, Discover Bank is offering the best % rates on savings accounts.  There are other places offering competitive interest rates such as Barclay’s and Capital One.  Opening a savings account with an institution paying good interest and connecting to your checking account is easy.  Setting up an automatic drip fund (of $10 or more) into a high paying savings account is easy.

*Keep in mind, this savings account is NOT the same as your retirement account.  A Roth IRA or a 401k must be established separately and fed with your hard earned money separately.  Budget for $400 a month going to a savings account (or as much as you can afford) and also budget for a small drip of $10 to $20 a week into a high yield savings account like Discover Bank offers.    An automated daily, weekly, or monthly transfer of a nominal amount is the key to saving money.  If you don’t put money away, you will spend it and it will be gone.

What I am talking about is putting away small amounts of money over time.  This is not even math really, just a law of nature.  If you put one pebble in a pool every day, the pool will fill up with pebbles.  Not math.  Physics.

The reason you may be wary or distrustful of what I am suggesting you do is because no one ever talked about it and we have expectations of being taken advantage of when it comes to money.  Everyone is working really hard to get us to part with our money.  And we part with it in a thousand ways every day.  Don’t part with 10% of your income.  Keep it.  Putting your money into a retirement and a savings fund is not parting with your money.  It is keeping your money for later.  This is what David Bach calls- Paying yourself first.  Before you buy stuff with the paycheck you earned, pay yourself 10% of that paycheck amount and put that 10% into a savings situation.  That way you will always have money to explore life and learn in your own way.

You should pay yourself first even if you have credit card debt.  Definitely, pay down that debt, but don’t wait until it is gone to start the drip fund or the retirement fund.  Do all three at once. And see Frog Medicine’s advice about getting out of debt.

If this conversation has spoken to you but you need more information- go to the library and find the following books:

Smart Women Finish Rich by David Bach.

The Automatic Millionaire By David Bach

The Five Lessons a Millionaire Taught me by Richard Paul Evans

David Bach, along with many many other financial advisors will articulate this advice in great detail as well as give lots of other first-rate suggestions about gathering wealth.  If you are over 50 you will find his book: Start Late Finish Rich more helpful than the first.  But both are very useful.  The key here if you are no longer in your 20’s or 30’s is to KNOW that it doesn’t matter.  You can still accumulate substantial wealth that will enable you to live comfortably in your older years.  Don’t let frustration and regret keep you from doing what you can do now to improve the situation.

If you start today, wealth will grow faster than you think it will.  And what you grow will ALWAYS be better than nothing!

Paul Richard Evans also has very usable advice about how to “win in the margins” and earn more money in easy ways you may not have thought of.  His book has excellent advice on how to increase income and decrease spending in ways that don’t feel constrictive.  By identifying what is important to you, you can eliminate wasteful spending that doesn’t actually contribute to your happiness.

I hope you take these steps and secure your future!

Be well, live well!

Otter