You’re 32 on paper, but your bank account looks like it belongs to Jimmy Neutron. Time to put on those big-girl panties – it’s really not that hard.
your wealth
Who wants to be a millionaire? Maybe a better question is, how much do you have to earn to become a millionaire? R50k a month? R100k a month? Society teaches us to confuse income with wealth. But it’s not the same thing at all. I know people, many people, who earn ridiculous amounts of money, but are still in debt, anxious and trapped.
INCOME VS WEALTH: SPOT THE DIFFERENCE
Let’s say, for the sake of argument, that you start earning R10 000 a month when you’re 25. And that, every year, you get a raise of six percent until you stop working at 65. Let’s imagine that nothing ever goes wrong and you never miss a pay cheque in all that time. That would mean that you, with a very ordinary salary, would earn over R19 million in your lifetime. Nineteen million smackaroos would buy you something like 700 000 Big Macs and a lot of heartburn. You would have earned a million rand by the age of 31.
But a lot of people earn R10 000 a month and most of them don’t end up being millionaires. Obviously. Because they spend nearly all of their money.
Now, let’s take that same scenario, with you earning your R10 000 a month from age 25 with a six percent annual increase, but you save a third of it every month in a shoebox. You’d have saved a million bucks by age 41! And this is before you start investing that money.
This story is from the September 2018 edition of Women's Health South Africa.
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This story is from the September 2018 edition of Women's Health South Africa.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
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