- Home expansion / renovation (~500-750 sq. feet)
- Luxury car & costs for 5 years (insurance, gas, maintenance, etc.)
- Camping trailer, insurance & lot for 5 years
What can $100,000 earn you?
Alternately, if you deposited the $10,000 saved each year over the duration of 10 years instead of spending on one of the luxuries above and then earn an average return of 7.8% each year for the next 30 years you would own investments valued at $694,763.08.
Because your investments should continue to earn an average return of 7.8% each year, you are likely to find yourself in a situation where you can now withdraw $50,000 each and every year and the value of your investments would still continue to appreciate.
These numbers are calculated based upon historical averages and use assumptions which may justify further consideration, adjustment and some critique. If you’ve already started to criticize the above numbers then you’re likely your own worst enemy. You’re trying to make excuses to disqualify the option of investing so that you can justify the option of purchasing.
I want you to do what you want without feeling guilt about your choices; but I urge you to do decide while knowing the facts. In order to make an informed decision you need to understand with complete clarity that any single expenditure in your lifetime (perhaps the very expenditure that I describe above) can and typically will irrevocably change the final 50 years of your life. Understanding this is one of the most powerful tools that you can arm your mindset with.
Founding Partner, Amplified Investments
Investing in real estate
Last year at this time I was in debt up to my eyeballs. As you may recall from my email asking you for help, I was stuck in a car lease with a monthly payment of more than $500. On top of that my insurance was well over $100 a month as well. Also if you recall I was spending $200 a month more than I earned and as a result I had built up more than $5,000 in credit card debt! Well after I had a discussion with you I was hooked. I read all of your blogs and made some small adjustments to my spending. Initially I thought I would regret downsizing my car and eating out a few times less a week but here we are a year later and I don’t miss the old car at all. Not only that, I really enjoy the occasional meals I eat out each week. Now for the finances, I’m no longer in debt and I’ve saved $15,000! I haven’t had a positive bank account balance since I can ever remember! Every month I’m saving at least $1,000 and sometimes double that! I’m putting together a plan based on your advice to start investing in retiring early. If I didn’t run into your blog a year ago my situation would be likely worse than it was last year. What a difference being shown the light can make! You always say if you change one life then writing your blogs is worth it, well you have, mine!!! Thank you so so much for taking the time to share your knowledge 🙂