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I’m stuck somewhere in the middle of a Robert Kiyosaki and traditional investing mindset. While I definitely care about retirement and want to do my part in making sure that my retirement is a good one, I am not all gung-ho on only going the stock market route.
I want some physical assets – like real estate and businesses.
So I’m always torn. Do I put as much money as I can into a retirement account or do I stick to saving for real estate investments? Ideally, I’d like to meet in the middle.
While this post isn’t so much about my philosophies on retirement I do think it’s important to note that there is definitely more than one way to achieve that end goal.
For now, I’ve delayed the real estate investment goal in favor of saving for a down payment. But in the meantime I’m also implementing a totally painless way to save more for retirement.
The No-Brainer Way to Save More for Retirement
Ready for it?
Slowly increase your savings percentages each year!
Those increases don’t have to be huge (or can be if you’re starting from humble beginnings like I am) they just have to be.
I started 2014 out by purchasing individual stocks. A couple months in I got brave and decided to put a couple hundred dollars in some medical marijuana penny stocks. (Because that was going to be the next big thing, right?) Big mistake.
Those suckers tanked.
My couple hundred is now worth about $40. Lesson learned.
After that I started buying dividend stocks. Out of the five stocks I bought only one of them has increased in value. Apparently, buying individual stocks isn’t my thing.
Fast forward a few more months and I decided to let Betterment do my investing for me. Their results have been much better! (Nothing amazing but I’ve earned money instead of lost money.)
I opened up an account with $50 and put an automatic deposit of $100 a month. Not a whole lot, but those small amount DO add up.
Realizing that $100 isn’t a whole heck of a lot I wanted to increase my contributions but since I’m dedicated to saving for a down payment (and not totally convinced that I want ALL of my retirement dependent on the stock market) I decided to increase my contributions by 20 percent. That’s only $20 a month.
I’m not going to miss that amount of money.
To make the deal even sweeter one of my clients is also contributing $100 a month. So in total I now have $220 a month going to retirement.
Let Those Small Amounts Add Up
Increasing your percentages, even by a small amount, really does add up over time. Who knows, maybe in a few months I’ll up that percentage again. When it’s done in such small increments I don’t even notice it!
If you’ve been holding off opening up a retirement account because you don’t think you have enough money to do so then I encourage you to give Betterment
a try. (That is my affiliate link and I only mention Betterment because until I found them I wasn’t aware I could start saving for retirement with only $50. They have no minimums!)
All you do is open an account of your choice, fill out a few questions so they can determine your investing profile (mine’s 90 percent stocks ten percent bonds) deposit some money (any amount you choose, there’s seriously no minimums), and they’ll invest your money in ETFs. (ETFs are exchange trade funds. They’re a diversified basket of assets, like mutual funds, but can be traded like stocks.)
You can even set a goal and then they’ll tell you how much you need to deposit on a monthly basis to reach it. As you can see, I’m way off track right now! (My goal is $400,000 by age 50.)
Bottom Line
It really makes no difference at all where you save your money as long as you save your money! You can save more for virtually anything by slowly increasing the amount you save.
You’re not going to notice an extra $5 a month leaving your bank account but when you add another $5 and another $5 and so on, you’ll start to see some amazing progress in your savings or retirement account without ever breaking a sweat!
Do you increase your savings percentages each year?
Linked Up to Thrifty Thursday
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