Many millennials are left confused after a survey said that 1 in 6 of them has already saved 100,000 dollars.
Unless you are one of the few lucky and financially savvy millennials out there, perhaps you also reacted exactly like the rest of the internet.
With tears running down cheeks and eyebrows raised, people checked the contents of their piggy banks and found out it went bankrupt!
In an interview with Bored Panda, financial expert Sam Dogen, who runs the Financial Samurai blog, explained about the topic.
Millennials and other generations replied to CNBC’s post on Twitter about the survey’s results with a healthy dose of humor. Some made references to the amount of money they managed to save in games while others said the words ‘debt’ and ‘savings’ were probably mixed up.
“I absolutely believe more than 1 in 6 millennials should have at least 100,000 dollars or more saved up if they ever want to achieve financial independence and not work at a job they hate for the rest of their lives,” Dogen told Bored Panda.
“Based on my 401(k) savings by age guide, you should have the following saved in your pre-tax retirement account by age:
-100,000 – 300,000 dollars by age 30
-250,000 – 1,000,000 dollars by age 40
-600,000 – 2,250,000 dollars by age 50
-1,000,000 – 5,000,000 dollars by age 60.”
“You have to get in the right money mindset. If you are already telling yourself it is impossible to save money, of course, you’re not going to do everything possible to save money. My #1 piece of advice is: if the amount of money you’re saving each month doesn’t hurt, you’re not saving enough,” Dogen explained.
He also mentioned about possible ways to save and earn more money. “After you make saving money painful, then you’ve got to take on side hustles to make even more money. Freelancing online, driving a car, assembling furniture, tutoring, mowing lawns are examples of some common side hustles.
“The absolute bare minimum is to save at least 20 percent of your income after tax each month. If 20 percent feels like a lot, don’t worry. You will get used to living with 80 percent of your income or working other jobs to boost your income.”
He added: “If 20 percent doesn’t feel like enough, it’s imperative you keep ratcheting up your savings rate until you need to make lifestyle changes. Your ultimate goal is to try and achieve a 50 percent savings rate after taxes. Once you get there, every year you work will equal one year of living expenses.”
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Replaced!