Three Factors to Amass Incredible Wealth

There are just three things that will determine whether you will become a millionaire and whether you will be able to retire early and I'm going to give you that information, here it is:

• How much you can save
• The return you can get on your investments, and
• How long you invest for

All of these items by themselves can enormously magnify how much wealth you can build and if you can take advantage of all three, it is extremely simple to accumulate enormous wealth.

Factor 1: How much you can save can magnify your wealth

The first step of any retirement plan is to figure out how much of your income you can save. It's the single most important part of the process because it allows you to figure out how much of your income you can put towards increasing your wealth.

The more of your take home pay that you can save, or put towards investment assets, the faster your wealth will grow.

It actually works in two ways to speed up your early retirement, because the more you save, the more you are investing and the faster your wealth builds, but it also reduces the amount that you need to retire. For example, if you can live of $5,000 per year, you're going to have save more, but also need less to retire, so you could probably retire in one or two years!

Figure out how much of your after tax income you can save, commit to putting that away and never touching it. I'm not talking about saving for a holiday or a car (though that's important), I'm talking about committing to a certain amount of savings that purely put aside to buy your freedom, to build your wealth so that you can produce passive income from investment assets.

Remember, the more you save, the more you will magnify your wealth and the faster you will become financially independent.

Factor 2: Your investment return can magnify your wealth

Your return on investment plays a huge part in increasing your wealth. If you're simply saving cash and this is your plan for investing for your retirement, it's going to take a looooong time. Especially in today's environment where you're only getting 2-3.5% return on your cash depending on where you put it. While it is possible to save cash and retire relatively quickly by increasing the other factors (savings rate and how long you invest for), the higher the return that you can get on your investments is going to magnify your wealth.

I'll give you an example.

1. If you save $100 per week for 30 years into cash and get 3% per year, you will have roughly $247,000. Probably not enough to retire on.

2. If you save $100 per week for 30 years into equities and you average 9% per year (which is a fairly accurate long term average), you will have roughly $709,000. Probably enough to retire on! Certainly enough to retire on if you don't like an exorbitant lifestyle.

Just by increasing your investment return by 6% per year, this is an increase of nearly $500,000, tripling the amount that you end up with.

Not enough for you? Then magnify the other factors. Boom.

Factor 3: How long you invest for can magnify your wealth

The other important factor, and most appropriate for people who can't save a lot of money is TIME. Even if you can only save a modest amount towards your retirement, then simply letting time and compound interest work it's magic will work wonders for you.

If you start saving when you are 20 and you can save $100 per week (if you can't save $100 per week then you need to read more of my articles), investing this at 9% through equities, you will end up with $2.75 million by the age of 65. An astronomical amount compared to your average person.

$100 per week is not a lot of money, but by steadily putting it away over a long period of time, compound interest working with time with magnify how much wealth you build.

Too long? Increase the other two factors. Boom.

So if you want to build massive wealth, you need to maximise the three factors
1. Your savings rate
2. Your investment return
3. How long you invest for.

If you can maximise all three, saving a lot, investing at high rates of return (9%) and invest for a long time, you will build massive wealth that will be indestructible.

How much?

If you can save $500 per week, invest it at 9% for 45 years (your entire working career), you will accumulate $13.7 million  and retire on $1,200,000 per year without your capital ever reducing, so you can pass this on to your family.

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I look forward to your comments and you can email me at earlyretirementaus@gmail.com

Peace! E.