When most of us think of $10, it really doesn’t seem like much, but over time, it can really add up. A recent study found that people who spend $10 a day can end up more than $145k in debt over a short period of time, so let’s look at the difference that investing $10 a day could make in your life. Most of us could afford to make a few changes in our daily spending habits to put aside $10 every day, or you can look it as $70 a week, or $300 a month.
After a period of ten years, with no interest, you would have $36,000 put aside. That’s pretty significant, especially when you compare it to what you would have if you spent that $10 every day. Most of us eat out or make little purchases for things we don’t need. You can look at it as though you have the chance to save $36k or waste $36k ““ there really is a big difference.
Now, let’s say that each year you took that savings and invested it into a high interest bearing account, the stock market or even your own new business. Instead of just putting money aside, you would be creating a secondary income stream. Since the vast majority of Americans are living paycheck to paycheck, this could be quite significant. With the right investments, you could easily make enough from your secondary income to more than replace the first.
Saving money doesn’t have to be difficult and you don’t have to be overly frugal to do it. Even if you don’t want to manually put aside $10 every day, you can simply set a goal to put aside $300 of your paycheck every month. As illustrated above, this does add up over time, even though it is a relatively small amount.
If you have the ability, you can put even more into investments to work on becoming less dependent on your paycheck. Another solution that you could try is called debt leveraging. Let’s say that you don’t have that extra $300 a month to put aside, but you still want to take advantage of this plan. One route you could take would be to borrow $3600 from the bank, or the same amount that you would save over the course of a year.
Invest that money into something that will provide you with a high rate of return and you can start reaping the same benefits. The payments on a $3600 loan would be quite low and you would be leveraging that debt towards something bigger and better. This is the perfect solution for those that are strapped for extra cash, or for those who prefer not to be overly frugal with their monthly budgets.
No matter how you look at it, creating more than one income stream is very important. You never want to be in a position where the loss of a job or an emergency could put you out on the street.
Photo Credits: mudfan