S01_E05 - Tips on How to Save

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Once your accounts are set up and put into autopilot, its time to get efficient. You'll come to understand that when it comes to investing, it's not necessarily the amount you earn or the amount you invest, it's the time you stay invested.

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Also, a disclaimer, that I am not a financial advisor, please consult with a professional before making any financial decisions. On with the episode.

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To illustrate the impact of extra repayments on a home loan, consider a $500k house purchased with a 100% bank loan, a 30-year term, and a 5% interest rate. Monthly repayments are about $2,700, totaling $466k in interest over 30 years, nearly doubling the house's cost.
Adding an extra $200 per month reduces the loan term by nearly 5 years and saves about $80k in interest. Increasing the extra payment to $500 monthly saves $150k in interest and cuts almost 10 years off the loan.
Building wealth isn't about sudden windfalls or high salaries; it involves small, consistent habits over time. Making minor lifestyle adjustments can significantly affect loan repayments. For example:
1. Reducing utility bills and switching to energy-saving bulbs.
2. Being more efficient with food consumption.
3. Using an electric scooter for short trips.
4. Making coffee at home.
5. Choosing a bank with no account fees.
6. Reducing streaming services and Uber Eats usage.
These savings, potentially totaling $300 monthly, can accelerate mortgage repayment, increase savings, or build an emergency fund. Additional income sources, like tax returns, bonuses, or side jobs, further contribute to this strategy.
Managing small amounts effectively prepares for handling larger sums. The same principles apply whether dealing with $50 or $50,000. It's about developing a mindset from the ground up. Wealth often accumulates subtly, and how one manages small savings can influence their overall financial growth and ability to build wealth sustainably.