How to Build Wealth With a 9-5 to Retire Rich

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It’s Sunday, 28th April 2024, and in this week’s roundup, learn in 5 minutes or less:

• Career Advice: How to build wealth with a 9-5

• Mindset: Why positive thoughts lead to taking more risks

• Stuff we are loving right now: Recommended course platforms and investment brokers to let your career income work for you

• Weekly round-up: What else happened this week, from Tesla’s Cybertruck recall to US Congress’ threats to ban TikTok

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CAREER CORNER

Very early in my career, I realized that not taking any risks with my money was the biggest risk, and I would be missing out on greater returns by not getting financially educated with my money.

Research over and over shows that investing will lead to you making more money in the long run, which was why I said to myself when I was working at Accenture in 2013 to open an investment account and start researching how to get onto the property ladder which I am so happy I did btw…(more on this next week and inside the community).

Savings vs Investing‍

It's time to consider the options and do some math. Let’s imagine you’ve received a $10,000 lump sum from a work bonus or you managed to save $10k and you are deciding what to do with it.

Option 1: Save nothing at all

$10,000 has landed in your bank account and you’ve decided it’s time for that great adventure you’ve been dreaming about. Or to buy that wishlist Camera, fly to the Maldives on an exotic baecation, or upgrade your career by enrolling in a course. Maybe you’re pumped to buy a Louis Vuitton bag to fly on a night out. Sometimes, a lump sum can change your current reality in a practical and positive way.

Option 2: Save it

You’re flush with $10,000, and you’ve decided to save it, and you plan to deposit an additional $500 a month over the next 30 years. You decide to put your $10,000 lump sum in a high-interest savings account, such as a term deposit. Using a term deposit rate of 5.01% - which at the time of publishing this was among the best on offer according to moneysavingexpert.com - in 30 years you’d have around $301,777 and earned compound interest of around $111,777 (taking inflation into account).

Try experimenting yourself with the money helper calculator.

Option 3: Invest it

The US share markets have grown investors’ money by a historical average of 10% per year since 1957. So, looking backwards, let's say you invested your $10,000 in the share markets in an Index fund such as the S&P 500 some time after 1957, and invested an additional $500 a month for 30 years. Based on the average 10% historical return, that initial deposit may have grown to around $703,207 and earned compound interest of around $513,207. 

Stacked side-by-side, the difference between both options could be up to around $401,430.

It's insane, right?

Especially when you look at it like all you needed to do to gain that $401,430 was to:

1. Open an investment brokerage account

2. Setting up a Stocks & Shares ISA

3. Picking an index fund e.g. S&P 500 Accumulator Fund

4. Set up a monthly direct debit.

Try experimenting with different starting lump sums and monthly investments with my favourite compound interest calculator here.

The reality is, you don’t need to choose one or the other, you could do both and have a savings pot for financial goals you are working towards and large payments you need to make under 5 years and have an investment pot for more a long term horizon. Here is a great blog on how to determine if you should save vs invest.

GET MORE SH*T DONE

Your mindset is so key when it comes to investing. When I spoke recently to Emmanuel from OneStopSave, we spoke about ‘poverty scars’ and how what we were taught about money from a young impact our future and mindset towards spending, investing, and taking risks.

Watch the video on how to manage your money and build wealth where we spoke about having the right mindset and building wealth with a few simple steps.

BEST FROM TIKTOK THIS WEEK

@girlsthatinvest

I get asked this question a lot 🙌🏽

STUFF WE ARE LOVING RIGHT NOW

Interactive Investor is a UK-based investment platform and a perfect investment platform. It is a low-cost, award-winning, online investment platform enabling you to invest in stocks easily and manage shares, funds, SIPPs, ISAs & more.

Course Careers is ideal for someone trying to get into a career with Tech and start for FREE.

Skillshare is perfect for those keen on learning a new skill and for continual learning in the creator economy. Anyone can take an online class, watch video lessons, create projects, and even teach a class themselves on topics ranging from videography to Facebook ads and growing a personal brand on TikTok.

MEMES & BANTER

BEFORE YOU GO

Celebrity News: Bobbi Althoff, host of The Really Good Podcast and a prominent social media influencer, is the latest victim of Deepfake videos using AI-generated pornography. In a recent interview, she spoke about her shock at being trending on X for the wrong reasons. “I was like, ‘What the f*** is this? That’s not my podcast,’” Althoff told Yahoo Entertainment at an event. Read more here

Business: Google is accused of making it harder to search for rivals. Tuta Mail, a provider of encrypted email services with over ten million users globally, has accused Google of leveraging its dominant market position to hinder searches for rival email services. Since March, Tuta Mail claims its visibility in Google searches for "encrypted email" has significantly diminished. The company has lodged a complaint with the EU, alleging that Google's actions have harmed its business, particularly in light of Google's own popular Gmail service. Read more here

Tech:  TikTok's Chinese parent company ByteDance says it has no intention of selling the business after the US passed a law to force it to sell the hugely popular video app or be banned in America. The statement from ByteDance came in response to an article by the technology industry website The Information that said it was exploring the potential sale of TikTok’s operation in the US without the algorithm that powers it. Read more here

Travel: Traveling as a young professional in 2024 can be both thrilling and daunting. Between managing work commitments and making the most of every trip, efficiency becomes key. Whether you’re traveling for business, leisure, or a bit of both, mastering a few travel hacks can significantly enhance your experience. Here’s your guide to smart, streamlined travel as a young professional today.

QUOTES & MOTIVATION

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