Simple Truths About Money
4. The issue is not how much money you earn it is how much you keep.
Mary is an investment banker who enjoys the finer things in life
and doesn't mind spending her $150,000 salary on them. Her only savings
is the $4500.00 she puts into her company 401K plan in order to get the
50% match up to 3% of her salary (for a total of $6750.00 per year).
Jill is a freelance technical writer who earns $100,000 per year and
puts $10,000 into her SEP IRA every year.
At the end of 5 years assuming that both accounts return 10% per year,
Mary's account will be worth $41,209 and Jill's account will be worth $61,051.
At the end of 10 years, Mary's account will be worth $107,577 and Jill's
account will be worth $159,374.
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