The Single Most Effective Way To Become Wealthy

Despite what you may have heard, you don’t have to be an expert in personal finance in order to become rich. You don’t need to receive a huge amount of income every month. You don’t even have to come from a wealthy family.

For the majority of millionaires, they have gotten to where they are today because they invest. In a Forbes article, it was revealed that 72% of the wealth of millionaires in Singapore is made through personal investments.

And it isn’t difficult to see why.

Suppose you invest just $10 per week:

After five years (assuming an average 8% return), you would have accumulated $3,295, and after 10 years, you would have $8,136. And that comes from simply setting aside slightly over a dollar a day.

Investing $50 a week would result in $16,473 after five years and $40,678 after 10 years. Imagine how much money would accumulate if you set aside a bit more each week, and did that for several years.

What’s more, if you earn $40,000 per year for example, you could potentially be richer than someone who earns $200,000 – by saving and investing more over time.

The Benefits Of Investing Early

Interestingly, if you invest early you could be getting more returns using less capital than if you were to start later.

Let’s illustrate using an example.

Imagine there are 2 individuals David Tan and Peter Lim. Both are age 35 this year and believe in the importance of investing and decide to set aside $300 each month (or $3,600 per year) to invest in a diversified investment fund that yield an average return of 12% every year

The difference between them is that David starts to invest early at age 35 and puts in $3600 yearly into the fund for the next 8 years. Whereas Peter only begins investing 8 years later at the age of 43 and puts in $3600 yearly until the fund matures.

Let’s take a look at what happens to the value of their investments when they both turn 60 years of age.

Believe it or not, David made $156,580.72 more than Peter, despite investing $36000 less in the investment fund!

So how did this happen? Here’s how.

By investing early, your investments have a longer time for the power of compounding to exponentially increase the value of your investments. Therefore, by starting early, you have a huge advantage compared to another investor who begins much later.

Another key take-away from this example, is the longer you wait to get started, the lesser the amount of money you make in the end!

Getting Started

Many of us fail to get started managing and investing our money because we’re intimidated or don’t know where to start. The thing is, investing is not as complicated or daunting as we make it out to be.

In fact, one of the best ways to get started is to simply start educating yourself in investing, one step at a time. A good way to begin is to read investment-related articles on a regular basis. You can source these free articles on a number of websites, including ours.

And of course, if you would like to cut short your learning curve, you could consider attending investment seminars organized by investment veterans.

About your author

</p>
<p><center>Team Wealth Academy</center>

Team Wealth Academy

Wealth Educators

Team Wealth Academy is a dynamic team who strongly believes in promoting financial literacy to everyone. Founded in 2004, the team has successfully organized the widely acclaimed Wealth Academy™ Program regularly for more than a decade now.

Disclaimer

Any content in this presentation should not be relied upon as advice or construed as providing recommendations of any kind. It is your responsibility to confirm and decide which trades to make. Trade only with risk capital; that is, trade with money that, if lost, will not adversely impact your lifestyle and your ability to meet your financial obligations. Adam Khoo Learning Technologies Group Pte Ltd (AKLTG) and its associated trainers are not liable for any losses incurred from your investment activities. Past investment performance is not necessarily indicative of future performance, even if the same strategies are adopted. All forms of investments carry risks. Such activities may not be suitable for everyone. This course presentation is not meant to be a recommendation to buy or to sell securities nor an offer to buy or sell securities. The publishers of Adam Khoo and AKLTG are not brokers, dealers or registered investment advisors and do not attempt or intend to influence the purchase or sale of any security. AKLTG does not guarantee the accuracy or completeness of the information displayed. This is shared purely for educational purposes only. 

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *

Other articles you might be interested:

Beware of the "Adam Khoo" Scam!

Dear investors and traders, Adam Khoo here (the real one). It has come to my attention that scammers are using my name and reputation as a financial educator to solicit money from my students and online followers. While my team has reported…

Is It Safe To Use CPF To Invest In Fixed Income?

In investment, we always tell people that bonds are generally safer products than shares. But is it true that bond buyers really have no risk?

Passive Income - How Do We Generate?

In our quest for financial freedom, we tend to come across the term “passive income” very often. So what exactly is passive income and why do so many people desire to have some form of passive income?

Market Bullish But Short Term Overbought

As you know, a breakout from resistance/consolidation is a very bullish sign. Yes, US markets are indeed in a very bullish phase right now However, unless you have been long already, I would caution jumping in right now and buying at this breakout.

Adam Khoo with Michael Covel on Trend Following (Podcast Included!)

It was an honour to be interviewed by Michael Covel, the foremost authority on 'Trend Following'. Michael is the best-selling author of 'Trend Following' and 'The Complete Turtle Trader'.

More Jobseekers Than Job Openings In Q2

If you have been keeping abreast of the local news lately, you would have noticed that the employment situation in Singapore have turned for the worst.

A Candid Interview With Most Preferred Investment Speaker, Adam Khoo

Adam Khoo Learning Technologies Group (AKLTG) was voted the “Most Preferred Financial Educator” at the ShareInvestor awards of 2016. We sat down with professional stock investor and chairman of AKLTG, Adam Khoo, to seek his thoughts on how investors can maximize their returns on their investments.

How To Profit By Using "Insider Trading" Information

In this article, we are exploring perfectly legal ways of utilising insider trading information to help us in our trading decisions. Simply because we are going to look at ways of getting public “insider” information that anyone can access at any time on the Singapore Exchange (SGX) website.

Guaranteed Returns In Investing?

From time to time, we tend to encounter investment schemes that “guarantee” a certain rate of return (often in the range of 20% per year and above) and have a relatively short exit timeframe. Sounds too good to be true?