A lot of Americans don't get it; they don't recognize the value in making wise financial decisions and the value in making hard decisions early on, and that leads to our eighth mind-blowing money stat.
Retiring Americans right now, according to Synchrony Bank, those that are entering into retirement, have only saved on average about two hundred and twenty-one thousand dollars. Yeah, this is the graduation gift for the YOLO crowd. You know, as you find out very quickly when you only live once, but unfortunately, most likely that once is going to be a ripe old age, and you better plan accordingly.
And a lot of us procrastinate, you know. We know that the three ingredients of wealth creation are really discipline, turning that discipline into money, that money getting invested, and then giving it enough time so it can grow and be nurtured, and just your money can actually work harder than you can. But the problem is nobody ever did the component of the discipline that it turned into money, and then they wake up one day with no time left, and they go, "What do I do?" And that's exactly what this stat says. If we have retiring Americans who have only saved 221 thousand dollars, but that doesn't sound like that's enough, an army of dollars to generate that much income. Yeah, if you think about it, just on like a four percent safe withdrawal rate, that's going to generate a little over eight hundred and eighty dollars a year or about seven hundred and forty dollars a month before taxes.
So, okay, yeah, maybe you have your seven hundred and forty dollars, and then if you're older right now and you're closer, you're gonna have maybe some Social Security payments that come in. But if you've not been living that lifestyle, living up to retirement, and perhaps you've been spending a hundred percent of what you make, and you've been making a good income, and all of a sudden you'd retire and you have to drop your lifestyle down, that's not going to set you up, I think, for the type of retirement that you want.
And here's what's really frustrating, you know, this is retiring Americans, the younger generations, Brian, aren't doing a whole lot better. Twenty-eight percent of non-retired people, so folks that are still working, still accumulating, don't have any retirement savings. They haven't even started the journey yet. Well, it's difficult. Like, it's simple but it's hard, and you have to make difficult decisions now so that your future self doesn't have to make as difficult decisions. But I think a lot of people are missing that, they're not willing to make that hard choice.
Yeah, the big takeaway, I think a lot of people will just say, "Your situation, my situation's tough, there's not enough money." And I know times are tough, I don't want to dispute that. But I think what I thought was interesting just in the last month or so, it was a big stat that came out about positions or jobs that, you know, careers that create millionaires. And it was like engineers, which of course, big shocker, you know, they're super analytical, they're disciplined, they make it happen, accountants, CPAs, and stuff, were high number two on the list. And then right around three or four was teachers. Oh, and we all know teachers don't make a lot, don't make a ton of money. So, how were they one of the most successful professions to actually create seven-figure status?
And we work with a lot of educators ourselves, you know, and it is one of those things where you don't have to make a ton of money to be successful, you just have to be very deliberate that you're going to be disciplined. Remember the first ingredient, that discipline turns into money, that money gets invested and works just as hard, if not harder, than you can with your back, your brain, and your hands. And then you give it enough time to let it build upon itself. And the earlier you figure that out, the easier it becomes.
Bro, we're talking about this in show prep, remember, like when you first went off to college, you had those friends in freshman year like, "Oh, I'm finally free, I'm gonna go party and have a good time, and I'm not going to worry so much about classes." And because they didn't make the good decisions their freshman year, they carried that tale with them into sophomore, junior, senior year, and they had to buckle down, and they had to make some really hard decisions later on in their career. Saving for retirement is no different.
If you are someone who squandered your 20s and squandered your 30s, you're gonna have to make up for lost time in your 40s and 50s if you want to move towards your time. But if you are a young person, don't waste it, because if you can start early, if you can just get on the path and let your dollar start working for you, you'll be amazed at what they can do when you give them enough time. It's just a matter of starting and starting somewhere. The best time to start saving for the future was yesterday. That means the second best time to start saving is right now, today.
So, I'll combine two of our favorite jock quotes, like always, "Don't skip leg days." You've got to build that financial foundation. But you were talking about earlier, I remember you, you have a saying, something like, "You do it easy." What was the saying?
I'll talk about it from college baseball. "Do it right, do it light; do it wrong, do it long." That's it, that's exactly what we're talking about here. For saving for retirement, you know what the easiest way to do it right is? To make it automatic. If you can actually make your savings plan and inevitable wealth-building, meaning you set it up on a monthly basis, I don't care what age you are, I don't care if it's fifty dollars a month right now, do something today. Because you'll find out if you can let this thing get traction, that fifty dollars is going to turn into five hundred a month, then it's gonna turn into a thousand dollars a month. This thing builds upon itself. And then all the while, it is just building, growing upon itself out of, meaning, last week with one of my clients that's pondering retirement, he has not been the most disciplined saver, right? But I feel so proud that I've nudged him every chance I get. I was like, "Hey, you know you're doing that 401(k), why don't we go and max it out this year? You've got the income, we can take a little bit." "Hey, why don't you take that automatic account builder from five hundred to a thousand?" "Now we take it up to fifteen hundred." Like, "I don't know." But, yeah, okay, let's try it out. And then he forgets it in two years later. He hadn't even thought about it. And now he has built a multiple seven-figure, not making a ton of money, but I feel so proud as a financial planner that, from a behavioral standpoint, nudged him into doing this automatic saving that created an inevitable success for him. You too can do that. So just start somewhere, and I think that you're gonna see it starts doing the work for you.
I love it, and Brian, the thing that I think is so important is the time that you put in, and I think society tells a different story. They want you to believe something else that it doesn't require time, but we know time is often required when it comes to building wealth. And that's our ninth mind-blowing money stat that most people don't actually become millionaires until age 49. It is not the folks on social media and TikTok and Instagram, and fill in the blank of your social media, telling you that you can be a 24-year-old millionaire tomorrow. I don't think that's the norm, and I don't know that that sets a realistic expectation.
Well, I want to give a little depth to this because a lot of people will see one stat and they go, "How does that, I don't know if I believe that." Because, you know, you know there's, you can have stats that lie to you or mislead you, just like you have a chart that's here. Here's what I know. When you look at other influences of my financial life, "The Millionaire Next Door," they have the whole Millionaire Next Door formula, which is you take your income times your age, and then you divide it by 10 to figure out how successful you've been on building wealth off of your income. We all know that formula I just gave you is kind of worthless if you're under 40 years of age because you haven't had enough time for that formula to keep up with where your income actually turns into assets that build.
Well then you take the Ramsey Solutions research, they found that 49-year-old stat is one thing, but what they, it's also in the research, it takes them typically 28 years to build this seven-figure success. That aligns right with the Millionaire Next Door research. So there's an intersection that you quickly realize, no, wealth is a slow, deliberate, consistent process. You have to create this automatic account-building behaviors that will create consistent results that could lead to this inevitable wealth. And you don't want to get distracted by all the get-rich schemes, the things of the day that everybody feels like around you is getting rich off of. They don't, I'm just telling you, those are distractions. Don't let social media, don't let your anybody who's telling you how much money they made off of doing this one thing, they're not telling you all the ways they lost. You need to go with the automatic processes, using index funds and other things like that where you have reliable, inevitable wealth-building processes working for you. And what's beautiful is when you do that, the numbers substantiate why is that 28 years so valuable? Why do people hit millionaire status around age 49? It's because of our 10th mind-blowing money stat.
By the time that you retire, 92 percent of your portfolio, if you were a consistent saver starting out in your 20s, there's a good chance that 92 percent of the whole portfolio you've built is actually growth, earnings, gains, investment returns, not the money that you had to put in. It's your money working for you. If you can give it enough time, the picture is incredible. I love this stat.
But I think that goes, and you guys love it because I can't say this word very well at all, but "boiling point." It sounds a lot like "boiling point," but it's boiling point, you know. We all know that water boils at about 212 degrees Fahrenheit, 100 degrees Celsius. And then a lot of people, you know, if you think about this in the analogy of wealth-building, and we have a slide for this, you start, you watch a show like this, it gets you all hopped up and excited about building for the future. So you say, "You know what? I'm going to listen to these guys, I'm going to start saving and investing 500 a month," and you just do it, you set it and forget it, and you come back to it five years in the future, and you look at your account and you go, "Man, okay, I see what these guys are talking about. Yeah, I've made some money. I'm up about 23 percent, but I know that still 77 percent of this account is..."
What are these turkeys talking about that 92 percent of my money is going to be the growth? You didn't give it enough time. That's why we always talk about the three ingredients of wealth creation, which is you, obviously, to have discipline, to put your mind to work, that creates money, that's the second ingredient, and then you've got to get enough time to grow. Well, you look at 10 years now, we can see the same behavior. 10 years now, 41 is your growth. 20 or 68, now we got breakaway, we have reached an exactly boiling point, but you can see after year five, no, you probably, you're like, "I just don't see it." And then that's where when we talk about 92, that's that the any money you put in while you're in your 20s, when you hit retirement, there's a good chance that 92 percent of that money, that came from the savings from your 20s, is almost all growth, which is incredible. Your money can work harder than you can.
So what's the takeaway here? The takeaway is get excited about what your dollars can do. You know, you guys talk all the time about how one dollar, we even have these koozies, one dollar can turn into 88 for a 20-year-old by the time they get to retirement. Well, maybe you're not 20, maybe you're 25. Well, for a 25-year-old, one dollar by 65 can still turn into 44 dollars. But guess what? If you let that money keep working, you still have 88 times power. Your timeline just pushes out of touch. For a 40-year-old, one dollar can still turn into seven dollars. So I would encourage, if you've not done this exercise right now, go to moneyguide.com/resources, then go download our wealth multiplier, and this will tell you how much can my money grow between now and the time that I retire. So, if you have been saving, maybe you're that person in your late 20s, early 30s, mid-30s, early 40s, take whatever you've saved up to this point and go multiply it times your wealth multiplier. That's what your dollars are already set on track to do. And then think about every dollar that I add to this just makes it more and more and more and more powerful. And you will likely be amazed one day when you get your time, you look back, say, "Holy cow, I was saving 500 a month, I've got this multi-million-dollar portfolio, and what I put into it, which is a small little chunk, and I let my dollars do the heavy lifting for me." For more information, check out our
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