How Saving at 25 can earn you $1 Million Dollars

Being a young adult fresh out of graduate school trying to find our place in the real world and ultimately finding out who we are and who we ultimately want to become is very intimidating for some of us. The pressures of our parents asking "When are you going to get a job?" or "What was the point in going to school?" or my favorite "What time did you get up today?" can be very irritating.
I can sympathize with young people because I fall into that category and have been there as so many more other people have at some point in their life.

So what is our easiest solution? APPLY!! APPLY!! APPLY!! too as many employers that fit the criteria of the field of study that we graduated from. As we kill time on Facebook, get a few games of angry birds in, or maybe a little FreeCell if you're the sophisticated type, we then begin to search for a professionalized template that we can copy and paste and use for our resume. After taking another two hours trying to remember where you've worked you have finally completed the resume and you quickly attach it in an email and send it to as many employers as possible. Then we wait.

In the mean time we pick up some more shifts at "Part timers" and hope that we hear back from someone at a company that we just applied for. Ultimately whats great is that these extra hours that we're working are starting to look better and better by the paycheck, now this makes us do one of two things and most of the time both: 1) Spend more money at the bar 2) Shop. And before you know it the extra income you were making is gone each week just as quick as if you never had it.

My family is full of successful entrepreneurs and one thing that I was always told was to "Save your money while you can" and what I got from that little quote was that the earlier you can accumulate savings the more money you will have when it's needed.

"How do you expect me to save money when I only work 30 hours a week?"
I love getting this question because I ask "How much money do you wish to have when you retire?"
They quickly respond with "I don't know" or "$1,000,000 plus"
If they give me a number I'll proceed to ask "How do you plan to achieve this financial goal" and again the response goes back to "I don't know".

You see most young people have no idea how much they need to save each year for their retirement, most don't know when to start saving, and the rest choose to wait until they have a higher income to invest. The answer to these questions is quite simple: 1) $20-$50k annually 2) Early 3) Bad idea.

People make retirement savings TOO complex when it's easy and simple.

Those extra hours that you picked up at the "Part timer" that have been going to the T-shirt Jean combo, the Mani/pedi, new dress, the 2-6 instead of the micky, and the extra few drinks for that special lady...or man each week could easily be turned into RETIREMENT SAVINGS. And once Monday comes along you think..."DAMN!! that was a lot of money I spend this weekend, this $60 better last me the rest of the week". When you keep playing this game each week with yourself you begin to realize that all the money you spent could have gone to something that you may have actually benefited from.

Its easy to spend $150 - $200 on STUFF each week because that's what we're used to. Being a student and not having to pay many bills, we tend too get to comfortable spending most of our disposable income that we are now accounted to live off of. While all of this is going on, in the back of your head all you can hear is your parents say "When are you getting a job?" even though you already have a job. Parents are smart, they say that because they can tell by your spending habits that you need to make more money for the type of lifestyle that you are living.

I proceed to ask people "What is $25 to you?" some respond with lunch or dinner, booze, cover charge and a drink, 1 movie ticket etc. As much as all of those answers are correct, $25 can mean a lot more. $25 can be the difference between a retirement income of $700,000 and $2,000,000 and when most wonder how? I say its simple, its about saving early, consistently, and making deposits when there is extra money. The earlier someone can save for retirement, the less they need to invest throughout their primary working years giving them a greater retirement income.

Example:
Someone who is 25 years old investing $25/week will have substantially more retirement income then someone who is 35 investing $50/week.
There are many Financial Calculators available on the internet that will help you calculate how much you need to save for retirement.

Parents want to know that their child/ children will be able to fend for themselves when the time comes. Knowing that you are saving for your financial future gives parents the peace of mind knowing that you will be ok.