If you want to achieve financial independence, you should not only avoid keeping up with the Joneses, but you should also go in the opposite direction. Algonga Shutterstock
According to a recent TD Ameritrade survey, people who save more than 20% of their income engage in financial behaviors that are far outside the norm in America.
After all, on average, these super savers put aside 29% of their earnings.Non-super savers, on the other hand, save 6% of their earnings.
According to TD Ameritrade, three out of four super savers are either financially independent or on their way to becoming so.
Those who aren’t super savers make up less than half of the population.
How do these super savers do it? The majority of them are aiming for financial independence, and many of them plan to retire early.This allows them to maintain their focus on the prize.
Furthermore, they share the following financial habits.
65% of people avoid taking on high-interest debt.
One of the most toxic poisons to wealth creation is high-interest debt.
Compound interest is frequently mentioned as a valuable tool for achieving long-term financial goals.Compound interest, on the other hand, becomes your adversary when you are in debt.Instead of seeing your savings grow exponentially, your debt grows rapidly.
If you make minimum monthly payments at a high interest rate, you’ll end up paying several times the cost of your item before it’s paid off.
If you need some motivation before taking on your debt, read How to Pay Off $10,000 in Debt Without Working Out.If you need professional assistance with your debt, talk to a reputable credit counselor.
60% of people stick to a budget.
Budgets are tedious, we understand.However, excitement isn’t all it’s cracked up to be.Wouldn’t you welcome a little boredom in exchange for a life free of financial worries?
Consider using an app like YNAB (You Need A Budget) if you need help budgeting or tracking your spending.It’s meant to assist you in creating and sticking to a budget so you can stop living paycheck to paycheck and start paying down debt and saving more money.
58% of people put their money in the stock market.
The stock market can be a scary place. Consider the stock market’s 20% drop in the last few months of 2021.
The stock market can be an exciting place to be, as evidenced by the 15% gain in the first few months of 2021.
Our recommendation is to ignore the highs and lows and focus on the long term.The stock market is likely to be your best bet for accumulating the type of wealth that leads to financial independence over time.
One last piece of advice: if you want to start investing early in life, do so.According to TD Ameritrade, 54% of super savers started investing at the age of 30 and 30% at the age of 25.Only 39% of other survey respondents were investing by the age of 30.
Read 8 Basics That Beginning Investors Must Know for more information.
55% of people save enough for retirement.
Life is costly, and many of us struggle to make ends meet on a monthly basis.It can be difficult to put even a few dollars into a retirement fund.As a result, making the maximum allowed contributions may appear to be pure fantasy.
People on the road to financial independence, on the other hand, understand that they must make sacrifices today in order to be financially secure tomorrow.
Super savers make daily sacrifices to invest for the future, such as foregoing a small vacation, skipping a few restaurant meals each month, and purchasing a less flashy car.
Check out 7 Mistakes Guaranteed to Ruin Your Retirement for more information on what to avoid when saving for retirement.
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