Investing works over time due to the miracle of compound interest. It makes your
savings and investment grow almost exponentially. In his book Become A Recognized
Authority In Your Field In Sixty Days Or Less, Bob Bly writes: “If you were to open an
IRA at age 50, and contribute $2,000 a year earning 8 percent compounded monthly, at
age sixty-five your IRA would be worth $54,300. Had you opened the same IRA when
you were twenty-five, and put in the same amount of money annually earning the same
rate of return, at age sixty-five your IRA would be worth more than half a million dollars
—almost ten times as much.”
Consider finding a good financial planner to advise you as to the best strategy for
your age.
A little bit of something is a lot better than a whole lot of nothing. That certainly goes
for saving, investing, and living. Find ways to cut costs, but make sure they make sense.
By that I mean, sometimes it doesn’t make economic sense to do something that appears
to save you money but really doesn’t. This is also called being penny wise and dollar
foolish. For example, driving all around town to save a couple of cents on a gallon of
gasoline probably doesn’t make too much sense. You’d probably burn up more fuel look-
ing for a bargain than you would have saved. Similarly, when it comes to band work, are
you doing tasks that take away from your time doing things that generate income? You
might be better off outsourcing them and focus your efforts on revenue generating activi-
ties such as marketing and promotion, making industry contact through phone calls, email
and personal meetings.
Here are words that should be etched in stone—live below your means. That doesn’t
mean going without. It means being frugal. It’s also worthwhile to note that most million-