Welcome to the third of five sessions in our Financial Planning Workshop. Today we will discuss another topic that should be considered when planning for your future. This workshop will not develop a comprehensive financial plan for you, but instead is intended to give you some ideas and tips to help in your planning.
To reiterate, financial planning is the process of organizing your financial attributes (assets, liabilities, earnings, expenses, taxes, savings, investments) to achieve the financial results you want in life (nice house, college savings, early retirement, vacation home). The process takes a lot of thought and changes over time.
Your First Million
What is the easiest way to wind up with a million dollars? Start with $10 million…..For those of us without the initial $10 million, how long will it take to accumulate a million dollars? If you earn an average of 7% per year on your investments, it will take 31 years saving $10,000 per year. Saving $20,000 per year reduces your time to 23 years, and saving $40,000 per year makes you a millionaire in only 15 years. A million dollars today will not buy as much as it once did. You might need $2 million or even $3 million to fund your retirement. Here is a table you can use to determine how long it will take to reach your savings goal: