The key to any billionaire strategy is savings. After all, another name for savings is funds: which we can grow via dividends-rich strategies and opportunities that increase our net worth.
Still, “how much should I save?” is reportedly one of the most commonly asked questions, reveal financial advisors. And here is what the experts and the billionaires have to say about it.
Save Between 10% and 20% Of Your Income Every Month
On average, somewhere between 10% and 20% of your monthly income. Unless you have grand designs (becoming a high-powered billionaire investor comes to mind) that will require you to strengthen your base funds in order to grow your cache.
The 50/30/20 is generally a good rule of thumb: devote 50% of your salary to necessities, 30% to discretionary items and 20% to savings. Yet it’s good to note that at iBillionaire we don’t believe in one-size-fits-all solutions. We believe that each investor has a unique profile and portfolio needs, which is why we assign each app user a personal advisor to help them attain their financial goals.
Factors To Take Into Account
How much you should save every month depends largely on your own long-term goals, personality and current income.
What helps though, is sorting through your goals and creating a savings timeline, split up into three sections: yearly goals, decade goals and lifetime goals.
Let’s say you want to…
- Become a rich financier. Then this would be a lifetime goal and you would have to save more than the average Joe regardless of your starting income.
- Go on an exotic holiday. Unless you’ve got your sights on a lavish trip-of-a-lifetime type adventure, this common savings target typically falls within the yearly goal category.
- Save up for a home. Then this would possibly be a decade goal if you are planning on buying with cash as opposed to using the down-payment plus credit system.
- Start a college fund for your child. If you have just one young child, then this is a decade goal.
- Squirrel away for a rainy day fund. Your aim is to enjoy the financial security of having a couple of months worth of income stashed aside just in case any emergencies arise; then you are typically looking at a yearly goal. But, it can quickly turn into part of your decade-long savings plan if you aim for a sturdier in-between-jobs-fund that can keep you afloat over a longer period of time.
Some might spend and then save whatever is left (better than nothing!), while others devotedly put aside a fixed sum —be it $100 or 15%— every month. The latter is by far the smartest choice.
Although there is no set rule for achieving the perfect trifecta of savings based on short-term, mid-term and long-term goals; we should reinforce that a fixed sum every month is by far the best idea.
That is why, if you need extra support in your savings endeavor, iBillionaire’s new auto-saving feature can help you dip your feet into the investment world while you save money every month and grow it via your favorite strategy.
Set Clear Targets
You need a savings game plan. To save for the sake of it is fine, but saving with clear and tangible goals in mind, is even better.
Make sure your goals are attainable and concise. For example, “I’m saving for a Lexus RC worth around $40,000 that I aim to buy in 2020” is far better than “I’m saving for a car”. Much like “I’m saving for a 2-month trip around the world when I turn 40, alongside my wife and kids, which I estimate will cost $15,000” is far better than “I’m saving to travel the world one day”.
Always have a clear idea of how much your goals cost and adjust your savings plan accordingly.
Adapt The Timeline
Look closely at your yearly, decade-long and lifetime savings goals. Ask yourself: are they feasible? Most importantly: do you have to reassess them? Perhaps change the category on a couple of them, from yearly to decade-long goal?
Ask all the questions that will help you determine a good timeline on your game plan.
And don’t forget to repeat this exercise every time your income fluctuates — be it for better, or for worse.
Analyze Current Spending Habits
Do you eat out three times a week? Binge on the latest tech gadgets? Stop by the local coffee shop every day?
Know thyself. And also know where your superfluous overspending goes so you know exactly what to cut when you are not meeting your savings goals.
This does not mean you shouldn’t treat yourself here and then, but do ask yourself: would you rather get that Venti Skinny Latte every day or invest $100 per month in a winning strategy that has 30.59% three-year returns?
That’s why iBillionaire makes it easier for you to meet your savings goals and grow your net worth. Setting up $100 worth of auto-savings on our dividends-generating Tech strategy can do just that.
Indeed, this is the end-all solution to all your woes: make more money. It is not the easiest for those who already have a full-time job with enough overtime to rival the hours kept by the richest financiers in Wall Street.
Yet building up those reserves is not always about doing the work yourself. iBillionaire puts the world’s top billionaires to work for you. Just select your preferred strategy based on investor and risk-profile — and voila! You’ll be investing like the best and brightest financial minds in the world in no time at all, earning more every month and en route to meet all your savings goals!