Grow Your Money Faster With These Wealth Accelerators
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Do you ever wish you could build wealth faster? Today, we're going to show you how. Brent, I am so excited because today we're talking about wealth accelerators that can speed up your wealth building journey. And stick around to the end because we'll cover some advanced ways to grow your money even faster.
So I'm Brian, he's Bo, and this is The Money Guy Show, where two financial advisors help you modify your money with financial nitrous oxide. So you can Tokyo drift your way to wealth. I said that. And with that, let's launch.
So, Brian, today we're talking about wealth accelerators. And when we say accelerator, we mean anything that can help you grow your money faster without gambling, speculating, or skipping steps. And as we've thought about how to lay this content out, they really fall into three general categories. There are things that can provide more fuel. There are things that can provide less drag. And there are things that can create better systems.
Yeah, if we're putting some color on this, more fuel, those that help you generate more money to invest. Talking about drag, these help you stop losing money and the momentum you're hopefully building. And then, of course, on the system side, these are to help you navigate money decisions to stay on the course long enough to truly build wealth.
All right, so let's start with the first one. Let's talk about the accelerators you can do that can provide more fuel. These are things that you want to maximize and that you want to increase. And the first one I think is no surprise. If you've been listening to our content for any amount of time, increase your savings rate.
Yeah, by the way, we lean in heavily on discipline, on you've got to live on less thing you make. If you can't do this, you're never going to be on the journey to building wealth.
Your savings rate is likely the number one metric that determines and defines how quickly you can build wealth. And if you want to see this in real time, if you want to really understand what this looks like, check out our compound interest calculator. Let's say that you're earning $100,000 a year and your goal is to save 10% of your income. If you divide that out monthly, that comes out to $833.33. If you could invest that amount for a 30-year period, and let's just say that on average, you earn a 10% rate of return, do you realize at the end of that period, you would end up with over $1.8 million? $1.8 million. And you would reach the $1 million mark after 25 years of investing. Now, that is just assuming that you save 10%.
Imagine now, what if you would save 25% of your income? That would come out to a little under $2,100 a month. If you did that same savings over a 30-year time horizon, again, still earning a 10% rate of return, you would end up with $4.7 million.
Now, look, there's a lot of people that say a million dollars isn't much money. I disagree with them, by the way. But 4.7, I mean, that's the type of money. We're talking about the level of wealth where even if you're using conservative withdrawal rates, you're doing tremendous things in retirement.
So I want you to think about this. Increasing your savings rate from 10% to 25% allowed you to cross the $1 million mark eight years earlier. Because you increased your savings rate, your army dollar bills is growing faster and faster and faster. So your savings rate is by far one of the biggest impactors you can have to your financial wealth building.
So we want to encourage you, go out to moneyguy.com slash resources, try out our compound interest calculator.
And while you're saving, we want you to shoot for a 25% savings rate. And why do we say 25%? Well, the truth is, Brian, a lot of people don't start their savings journey super early.
Yeah, we know from our own research is that the typical American doesn't even start saving and investing until they're 30 years of age. And then if you start saving and investing at 30 years of age, even in our healthy 25%, savings rate and investment rate, you're more than likely not going to have independence until you're age 60.
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