It can be really daunting when you look at your savings and realize, well, that you don’t have any. It’s not that you have no cash, but it’s all going towards bills, mortgage payments, car payments, and more each month. And the stress gets heavier at 40, when you really start thinking about retirement.
Retirement is certainly not going to happen if you don’t have anything set aside. That is why today, I’m going to show you how to start those savings and create enough income to allow you to retire by 65.
Don’t cut: Just shift
If you’re already weighed down by bills and other payments, then it’s likely you’ve already gone over your budget with a fine-toothed comb. Fair enough! You’ve cut out those coffees, stopped eating out as much, and yet, you’re still finding it hard to make ends meet.
Furthermore, you’re now super stressed with no real outlets to let off some steam. However, there are methods to add some recreation to your life for free! If you have insurance, consider using it towards some recreational activities such as massage therapy, acupuncture, and other pampering. Then find local events, such as farmers markets, instead of going out on dinner dates with your partner. Little things like this can not just create savings but long-term growth in income by simply shifting your spending rather than cutting it completely.
Since these are small changes, I would look for a small investment to add to the stock market each month. If you only have $100, I would put it to a top dividend earner like Slate Grocery REIT for substantial income at a 7.77% dividend yield.
Earn extra income
If you need to start earning extra income on the side, consider small property investments to rent out. While buying an income property can certainly create passive income, there is a lot of work with it. So, instead, try using the properties you already have!
If you’re in an apartment in a big city, rent out your parking spot or storage unit. Do you have a garage or attic or even a shed? Rent it out to small-businesses needing cheap storage for their products. All this can create substantial monthly income. In fact, you could make over $500 per month by doing just two of these options.
That’s far more you can use to invest, so I would consider a large investment that can create long-term income. A great investment would be CGI Group, which provides you with stable growth in the software industry. It’s a solid tech stock with decades of growth to help you on your way to savings.
Pick a drop and stick to it
Finally, you may already have some funds you can put aside each month. Use that to invest in companies you’re interested in that have dropped by a certain percentage. You can create alerts that will notify you when those stocks have dropped by 5%, 10%, or whatever you choose. And once they drop, stick to that number.
Sure, shares may drop further, but they’ll eventually turn around if you’ve chosen a good company. That’s why I’d consider a Big Six bank. If you’ve invested in a company like Canadian Imperial Bank of Commerce, you would lock in dividends and long-term income from a bank with provisions for loan losses.
Bottom line
If you were to put all this together, then you will absolutely create savings in no time. Not only will you have a total of $7,200 from your new income, but you’ll add on dividends on top of this. Using the average performance of these stocks, you could have in 25 years $224,803 from Slate investments, $1.74 million from CGI stock, and $381,555 from CIBC stock. That last one is also taking advantage of 11% drop in share price.
In total, you’d have $2,346,358 in savings over 25 years. That’s definitely enough by 65!
