For young people looking to build a fortune, the road to wealth is paved with pitfalls. Wealth management specialist Nir Kesar reminds us that wealth does not come overnight, but requires commitment and patience. According to a Schwab survey, to be considered rich you need to have 2.2 million dollars. To achieve this at retirement age, i.e. around 65, financial planning is essential.
Age 65 is often cited as the horizon for achieving this goal. It may seem a long way off, especially for those just starting out in working life, but time is a precious ally in building wealth. Savings and investment are the pillars of this strategy. The stock market is an unavoidable option, with its track record of returns in excess of inflation.
Investing regularly in funds tracking the US or global stock markets is a simple and effective method. Historically, the market offers a return of around 7% a year, after subtracting inflation. So, by saving $10,000 a year from the age of 25, it is possible to reach $2.2 million by the age of 65, which, taking inflation into account, would represent around $5 million in current purchasing power.
The definition of wealth varies from person to person, and everyone can adjust their savings plan according to their aspirations. There are many careers in a variety of fields, including health, engineering, architecture, finance, law and IT, that can help you achieve your financial goals. It's also important to consider where you live, as some places offer a better balance between cost of living and salary.
However, you should bear in mind that the stock market is volatile. Periods of decline are inevitable, but patience and perseverance are key. The real barrier to wealth is not market volatility, but rather a lack of knowledge and early preparation.
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