How 28yo saved $138k in two years
A MAN who saved a whopping $138,000 in just two years has revealed how the same smart strategy can make almost anyone a millionaire within three decades.
The US blogger and finance expert, who goes by the pseudonym Sean "The Money Wizard" Potter, is just 28 years old but is already looking at early retirement after managing to save the massive sum between April 2016 and April 2018.
He pulled it off by squirrelling away small amounts of money every single day without fail, starting with just $US5 ($A6.91).
But after crunching the numbers, Mr Potter found saving and investing $US30 ($A41.48) per day with a seven per cent rate of return would net more than a million dollars in 30 years.
In a recent blog post republished in Business Insider, the Minneapolis-based money guru said he was originally inspired by the finance book Automatic Millionaire by David Bach.
In it, Mr Bach described a strategy he dubbed "The Latte Factor" that involves putting aside the equivalent cost of a cup of coffee each day.
"I immediately found the idea fascinating. And as a money blogger chasing total financial freedom, of course I wanted to figure out how much I'd have to save per day to reach my ultimate goal: a $US1 million ($A1,382,550) dollar portfolio and an early exit from the rat race," Mr Potter wrote.
Building on Mr Bach's plan, Mr Potter eventually came up with The 30 for 30 Rule - which involves saving $US30 per day for 30 years.
"All it takes to become a millionaire is to save just $US30 a day (that's assuming the stock market's historical 7 per cent rate of return). Over and over again," he wrote.
"I don't know about you, but I immediately found this incredibly relieving. I'd be intimidated if the only path to wealth was a lucky break, a brilliant business idea, or a Powerball victory.
"But $US30 a day? Anyone can save $US30 a day!"
These days, Mr Potter is saving around $US100 a day to put towards his early retirement plan, which he's done by picking up extra hours at work and cutting back on spending.
He also invests in a "mix of index funds" that has increased his net worth from $US158,000 ($A218,442) to $US231,000 ($A319,369) in one year.
"A little bit of effort, over and over again, is all it takes to build serious wealth," he said.
Mr Potter's ultimate goal is to retire early, and he is now on track to pull off that feat by age 37 "at the latest".
Mr Potter regularly updates his followers on his growing net worth and his expenditure and he has also shared a number of strategies for cutting back spending in all areas of life including holidays and Christmas shopping.
Want to follow stories on the cost of living? Click here to sign up for notifications.