A: Fact: 20% of your income determines 100% of your wealth.
Whether you make $45,000 or $1,000,000, what you do with your income, as well as debt, are the two biggest factors. I have written a number of posts on this topic.
It’s a reality, though, that some people are unable to save any money throughout the year, despite managing their income responsibly.
My advice to people in your situation is to take 20% of your income tax refund and invest it.
Start an emergency fund with the rest, if you don’t have one. Pay down debt. Use some of your refund for a vacation. But invest 20%.
See, compound interest is an extraordinary thing. It can turn $100 into $7000 over time.
That may not be life changing.
But if that’s all you can do for now, it’s better than doing nothing.
Please feel free to share your questions with me! Email me here.
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