Pay Yourself 10% First

Message/Experiment of the Week:

Did you know that many professional athletes end up bankrupt (Study: 16 percent of NFL players go bankrupt within 12 years - CBSSports.com)? However, by paying themselves first and setting aside 10% of their paychecks for investing they could avoid this financial heartache. In the video below Marco will show you how to easily pay yourself first, and if you put that 10% in an investment like an S&P 500 Index Fund it can grow quickly (Billionaire Warren Buffett swears by this inexpensive investing strategy that anyone can try (cnbc.com)). 

This simple trick can save you from financial heartache too. The median American household brings in around $75,000/year (Income in the United States: 2022 (census.gov)), and if you set aside $500/month and put it an S&P 500 index fund with an 8% expected return that $500/month investment will be roughly $700,000.00 in 30 years (Compound Interest Calculator | Investor.gov).

For an experiment this week, start paying yourself first, and put 10% of your paycheck in an investment. Your future self will thank you!

Quotes of the Week:

• “Wealth, like a tree, grows from a tiny seed. The first copper you save is the seed from which your tree of wealth shall grow. The sooner you plant that seed the sooner shall the tree grow. And the more faithfully you nourish and water that tree with consistent savings, the sooner may you bask in contentment beneath its shade.”
  ― George S. Clason, The Richest Man in Babylon 

• “Why Warren Buffett bet on index funds

  The bet was this: Over a 10-year period commencing January 1, 2008, and ending December 31, 2017, the S&P 500 would outperform a portfolio of five hedge funds of funds, when performance was measured on a basis net of fees, costs and expenses.

  Buffett, who chose the Vanguard Index Fund as a proxy for the S&P 500, won by a landslide. The five fund of funds had an average return of only 36.3% net of fees over that ten-year period, while the S&P index fund had a return of 125.8%.” (Billionaire Warren Buffett swears by this inexpensive investing strategy that anyone can try (cnbc.com))

Video of the Week:

How To Pay Yourself First

Song of the Week:

Demi Lovato - I Love Me

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