There is a story circulating about
However, that got me thinking about the various deals that I post on this blog. I don’t know what you do for work, but I trust that you work hard and balance your
1. Consider a target of $500 monthly profit coming from whatever deals are currently available. It could be higher interest on savings accounts, bank sign-up bonuses, credit card cash back, credit card sign-up bonuses, brokerage bonuses, US Mint purchases, savings on your normal everyday purchases, solo-business promotions, and so on. This is a relatively aggressive target, but if you consider everything together and average it out, it can add up quickly. I’ve been doing similar deals since I was 21 years old making $20,000 a year with $30,000 in student loans.
2. $500 a month = $6,000 a year = Maxed-out Roth IRA contribution. The 2021 contribution limit for Roth IRAs in $6,000 a year, with an additional $1,000 for those aged 50+. I always find this a very handy target to help me focus my profit from the
3. Invest in simple, transparent, productive assets. Some people are great with real estate, others reinvest in their own private small businesses. We should appreciate that anyone with $1,000 can open a IRA at Vanguard with minimal fees and invest in the all-in-one
4. Repeat for 10 years. If you did this from 2011-2020, you’d have over $100,000. Every January, I show how regular, steady investments over time can end up with excellent results. Here is a table from
Global stock markets are up even further in 2021, but we can simply stick with these numbers. The chart assumes a $10,000 annual investment ($833 a month), but we can easily scale it down to our $6,000 annual investment.
If you invested $6,000 a year into the Vanguard Target Retirement 2045 Fund, every year for the past 10 years (2011-2020), you would have ended up with a total balance of $110,822. (If two people did this, they would have over $220,000!) These are real-world numbers based on $500 a month, not a theoretical result from a calculator. You can argue the details, but even with only $250 a month, you’d have ended up with over $50,000. (You would have done even better going all-in with an S&P 500 index fund as well, but this is an easy, set-and-forget choice including global stocks and bonds.)
I admit, I like to play the game of “winning” easy/free money. It’s much more enjoyable to me than any video game. I also try to only pick and choose those that offer a good payout/effort ratio, usually over the equivalent of $100 an hour. Now, these small deals will never replace a successful career, which can supercharge your savings into the realm of financial independence. However, this is yet another reminder that small amounts, however attained, can add up to a significant net worth over time when invested productively and left alone. I have the Vanguard Roth IRA statements to prove it.
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