A great article over at CNBC.com tells of a young professional who took the extraordinary step of saving half his income, and, as a result, went from having a net worth of basically zero, to having $100,000 in savings socked away in just three years.
What makes the story worth noting, in part, is that the subject, Richard Meadows, wasn’t earning some genuinely significant sum such that saving half of it would be of little inconvenience; his salary of just over $60,000 per year, while not a pittance, is hardly what anyone would think as being sizable in America in 2017.
So how did he do it?
Meadows attributes his success to two, specific strategies.
As he sees it, the first, most important step he took was to begin tracking his net worth. Although a basic step, few people do it the way they should: diligently.
Meadows tells CNBC that “if you're not measuring something, then you don't have that feedback loop. You don't know whether you're heading in the right direction.”
The other thing he did that worked so well was automating his finances.
Arranging to have money sent automatically each month from a checking account to creditors and investment accounts is a strategy frequently relied upon by the most successful savers.
“It stops you from sabotaging your own progress,” says Meadows. “If you run out of willpower and you blow all the money that you meant to save on a big night out or new shoes that you didn’t really need, then you’re never going to get anywhere.”
By Robert G. Yetman, Jr. Editor At Large