- Start saving early
- This makes the power of compound interest work for you.
- This makes the power of compound interest work for you.
- Contribute the maximum allowed to company retirement fund (and when you change jobs as you will don’t cash these savings)
- Save as much as you can, as early as you can, for as long as you can with this pre-tax money.
- Save as much as you can, as early as you can, for as long as you can with this pre-tax money.
- Spend less than you earn
- Aim to spend at most 85 cents of every Rand you earn.
- Aim to spend at most 85 cents of every Rand you earn.
- Pay yourself first
- As Warren Buffet says “Do not save what is left after spending, but spend what is left after saving”.
- As Warren Buffet says “Do not save what is left after spending, but spend what is left after saving”.
- You are your greatest asset
- Pursue personal growth and learning.
How much does Jen need to save to reach her goal?
Age Jen starts saving for the goal | Number of years to save for the goal | Required monthly savings* |
25 | 25 | R483.65 |
27 | 23 | R616.30 |
29 | 21 | R790.97 |
31 | 19 | R1,023.98 |
33 | 17 | R1,339.89 |
35 | 15 | R1,777.08 |
37 | 13 | R2,398.48 |
39 | 11 | R3,314.16 |
40 | 10 | R3,941.27 |
The above math is underpinned by the power of compound interest. To harness the power of compound interest, save as much as you can, as early as you can, for as long as you can.