How You Can Save $100K By The Time You Are 30
If you have $100K in savings by the time you are 30 and earn interest at a rate of 7% per year you will have $1,150,615 in your account by the time you retire. That’s a pretty good nest egg! Saving that amount of money by the time you are 30 is no easy task though. This task can be particularly hard if you come out of college with a mountain of debt. The easiest way to save is to gain more money. You do that by taking a job with more responsibility but less pay. Companies value leadership skills and the more responsibility you have the more you will lead projects/teams.
I’ve seen a lot of my friends leave college and get a job only to significantly increase the amount that they spend. While they were adept at being thrifty to keep their costs down while they were in college, once they left they found themselves living paycheck to paycheck. Just because you leave college doesn’t mean you should stop living like you’re in college. Get a roommate, take public transit if possible and live frugally. Commit yourself to saving as much of your income as possible every month and put any pay increases towards your savings.
The opposite side of earning more money is to spend less. Sure you will sacrifice some good times with your friends but buying drinks on a credit card you can’t pay off will cost you so much more down the line. Switching jobs can also lead to the biggest income gain. I have switched to six jobs over my years working and have gotten at least a 10% increase in salary with each switch. I recommend doing this no more than once a year though as employees frown upon people who have a lot of companies on their resume.
About Shaun Archer Tatum Shaun works in corporate finance in New York City. He has done financial consulting for several start-ups and has worked at several Fortune 500 companies. He has contributed several finance/investing articles on Seeking Alpha which have been published on Yahoo! Finance.