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Here's How To Turn A $100,000 Investment Into $1 Million, And Retire A Millionaire
Benzinga
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11/27/2023
Here's How To Turn A $100,000 Investment Into $1 Million, And Retire A Millionaire.
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News
Transcript
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00:00
Here's how to turn a $100,000 investment into $1 million and retire a millionaire.
00:03
Tip 1.
00:04
Understanding the power of compound interest.
00:06
Earning on both your initial investment and accrued interest over time is a key element
00:10
in multiplying savings, especially when starting early and allowing for sufficient compounding
00:14
time.
00:15
Tip 2.
00:16
The rule of 72.
00:17
Simply divide 72 by the interest rate you expect to earn.
00:19
For example, if you expect to earn a 10% annual return, it would take about 7.2 years (72
00:24
divided by 10) for your money to double in value.
00:26
Tip 3.
00:27
The value of money emphasizes the significance of starting retirement savings early, as money
00:31
invested today holds greater worth due to its potential for earning interest over time,
00:35
allowing for the development of a larger nest egg.
00:37
Tip 4.
00:38
Passive growth over 25 years.
00:39
One approach is to allow your $100,000 investment to grow passively.
00:42
With no further monthly contributions, compound earnings can help you reach or exceed $1 million.
00:46
A 10% average annual rate of return could transform $100,000 into $1 million in approximately
00:51
25 years.
00:52
Tip 5.
00:53
Active investing of $400 per month for 20 years.
00:55
With a 10% average annual return, this strategy could increase your savings from $100,000
01:00
to $1 million in just over 20 years.
01:02
Tip 6.
01:03
Diversification.
01:04
Diversification involves spreading investments across various asset classes, like stocks,
01:07
bonds, and real estate.
01:08
This approach reduces overall risk and can enhance returns.
01:11
Tip 7.
01:12
Long-term investments.
01:13
Focusing on long-term investments, usually held for a decade or more, allows you to ride
01:16
out market fluctuations and benefit from the compounding effect.
01:19
Tip 8.
01:20
Risk management.
01:21
It entails identifying and mitigating potential risks, like market volatility.
01:23
Secure your future by planning your investments wisely.
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