There are two key elements to creating wealth, and they are inextricably linked: time and rate of return.
To help you understand their importance, take a look at The Doubling Penny:
Imagine you have a penny in your pocket and it doubles in value every day for 31 days. After one month, you will have?
After Day 7, the penny is now worth 64 cents.
After Day 21, the penny is now worth $10,500.
After Day 31, the penny is now worth $10.7 million.
Indeed, money doesn't grow linearly but rather exponentially. Money grows exponentially due to the power of compounding. A penny earns interest. The interest then earns interest, and the interest on the interest then earns interest. And so on.
If you have a retirement plan at work, you need to join it and contribute some of your pay.
If you already contribute to your plan at work, increase your contributions so that you are contributing the maximum permitted on a pretax basis.
If you are already contributing the maximum and can afford to save even more, contribute to an IRA too. And if you don't have a plan at work, then simply contribute to an IRA.
And you need to contribute right now. The sooner you save, the less you need to save each month, the more wealth you will accumulate, and the sooner you can quit saving and start enjoying a life of leisure.
Books for Boomers: Reviews & Coaching Tips (FREE ebook editions)
Boomer Retirement Life Tips (ebook editions)