Usually advice is too general. The previous post, Pay Yourself Second, was a good example. It promoted the idea that a young person should save regularly but didn’t show how.
You could set up automatic distributions, from your paycheck, to a savings account in a bank ($100 per paycheck when starting out) to build up an emergency fund. What could be more accessible than money you could easily transfer to your checking account? Also: how much? Let me … If that’s too much just save $1,000.
After that, how do you save money? Here’s a specific answer: put money regularly into a Dividend Reinvestment Program (DRIP.) The key quote: “The compounding interest of DRIPs allows investors to purchase additional shares of stock at little or no cost …” (emphasis added.) That zero-to-low cost is a big deal in terms of compounding over time.
Not specific enough? Click here and sign up with Realty Income. This company pays dividends so incredibly regularly that it trademarked “The Monthly Dividend Company” as its slogan. Assuming all else is equal, a higher frequency of dividend payments is better. And, if you’re bored, here’s another article on Realty Income.
$100 a month. Increase this when you can afford it. Never decrease. Do this and be rich when you’re middle aged.