If I Had a Million Dollars
TRUE, $1 million isn’t what it used to be. There are now more millionaires nationwide than people who are unemployed.
Still, no one is going to object to having $1 million lying about, and Smart Money says in its current issue that a seven-figure nest egg is surprisingly easy to obtain.
The magazine contends that a hypothetical couple — who have two children they will have to put through college, have a big mortgage and earn $120,000 between them — can easily save $1 million within 10 years.
The suggestions for the couple in the lengthy cover article by Anne Kadet, with Rob Wherry, include the following:
* They should put $9,000 a year into their company 401(k) accounts. The money should be divided among United States stocks (60 percent) and a fund that invests overseas (20 percent), with the remainder in fixed-income investments.
* They should spend slightly less. “According to the Bureau of Labor Statistics, a household in our hypothetical couple’s income bracket spends about $75,000 a year on everything from the mortgage to mochachinos. Cutting that by less than 8 percent would generate an extra $50,000 to invest over the course of the decade.”
* They should go above and beyond at work. “If you started off making $100,000 and average a 6 percent raise every year instead of the 3 percent raise your plodding co-workers are getting, you’d earn an extra $171,000 over the decade.”
* They should take care of their health. “If one of our future millionaires went on a diet and the other quit smoking, they could conservatively cut their health care costs by a third, leading to an extra $12,000 in the bank by 2016.”
And presumably they would have more time in retirement to spend all the money they saved. Autor: Paul B. Brown