How Much Do You Need to Be Investing to Achieve Wealth?
Are you letting confusion about how much you need to be investing keep you from your wealth?
One of the biggest myths out there is that you need a lot of money before you start investing.
The reality is that this isn't true, and it's a misconception that keeps most people poor.
So, how much do you need to be investing to be a multimillionaire?
Or even more importantly, to know that you will be able to stop working and have your assets paying for your lifestyle, which is the goal of being wealthy?
Click here to watch the video to understand the 5 factors for you to work out how much you need to be investing.
Define Your Wealth
First, you've got to get really clear on what wealth is for you.
A key first step for you is working out what your financial freedom number is.
You need to figure out what is wealthy for you and what kind of lifestyle you want to be living.
There is no one number for everyone because we are each unique and different. It is essential to get clear on what you want—not what you think your parents, spouse, partner, kids, or social media expect from you.
The purpose of money is to enable you to live the life you want. When you know the price tag of your wealthy life, you can then work out the value of the assets you need to pay for that lifestyle.
This number, which I call your freedom target, helps determine how much you need to be investing to reach it.
Assess Your Current Situation
Once you know your destination, you need to know your starting point.
Take stock of your current situation:
- Do you have any investments already?
- What is your net worth?
- What investments do you have?
- What liabilities or debts do you have?
- Do you have an emergency fund and a cash safety net?
Assessing these factors will help you determine the gap between where you are now and where you need to be.
Create Your Plan
With your freedom target and starting point in mind, you can now put your plan in place.
You need to figure out how much you need to be investing regularly.
Aim to invest about 10% of all the money you earn, including bonuses and tax rebates.
Consistent, regular investing is more important than waiting until you have a large amount of money. Start with whatever amount you can.
You can begin investing with small amounts - 25 pounds, 40 dollars, 300 Rand a month - it doesn't matter where you are. The important part is to start investing, growing, and learning the skills. As your financial situation improves, you can increase the amount you invest.
Smart Wealthy Spending Plan
A great simple rule to follow is the 50-30-20 rule, also known as your Smart Wealthy Spending Plan:
- 50% on necessities: Roof over your head, food, and access to opportunities. Necessities should consume no more than 50% of your income.
- 30% on wants: This includes play money, growth money, contributions, and gifting. These are things that create a healthy ecosystem of spending.
- 20% savings: Of this, 10% should go towards short-term savings for future spending, and 10% should be invested to create your freedom.
The most important bill you should be paying is your freedom first.
Power of Compounding
Once you commit to investing 10% of all the money you earn, you start to benefit from the power of compounding.
Compounding creates your freedom, not you. By consistently investing, your assets will eventually generate the bulk of your financial freedom.
Many people worry about needing a large amount of money to be financially free.
Remember, your assets will work for you. Less than 10% of your freedom number needs to come from you initially, but you need to start it. Compounding will provide 90% of your freedom number.
Get started today with small amounts of money and claim your life back.
Huge Wealth Love,
Ann
P.S If you want to learn how to get your investments set up in a safe and secure way, I have a free Investing workshop for you where you will learn how to implement a proven investing strategy, the exact strategy that formed the base of my financial freedom and a strategy that I still use to this day!
