How to save 5million dollars before retirement
Orville Rogers, a 100-year-old retired airline pilot with $5 million in the bank used a timeless tip to build his fortune
Rogers is enjoying 40 years of retirement with a nest egg of $5 million in his retirement fund because he started saving early, he told Money.
According to a recent Money profile by Elizabeth O'Brien, Rogers had to retire from his job as a pilot when he was 60 because of company policy. But Rogers was prepared — he had been saving since he was 35.
"The key to success in any investment is periodic investments over a long time," Rogers told Money.
In 1952, Rogers started a retirement savings account. At that time, saving for retirement wasn't widespread. The 401(k) wasn't established until 26 years later, and people relied mainly on a pension or Social Security.
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Rogers continued to save without pinching pennies and while donating to his church and various Christian causes, he said. He eventually opened an account at Merill Lynch that he said was worth $5 million today.
Rogers may have been ahead of his peers, but many financial experts today advise the "save early" strategy.
Saving early and consistently lets you take advantage of compound interest, in which both the balance and older interest payments earn more interest over time, Business Insider's Akin Oyedele reported.
"Save as much as you can as early as you can," Katie Nixon, the chief investment officer at Northern Trust Wealth Management, previously told Business Insider when asked what her advice would be to someone starting their career. "Start saving and enjoy the benefits of the eighth wonder of the world, which is compound interest."
The chart below shows how saving at different ages can affect your nest egg come retirement. The person who started saving at 25 has more money in the bank at 65 — at least $100,000 more — than the one who started saving at 35 or 40.
And the person who started saving at 40 would have to double their savings rate to end up with more money at 65 than the person who started saving at 35.
Though Rogers didn't start saving until he was 35, he's been consistent since then.
Consistency is key in investing, Ramit Sethi, the author of a best-selling book on personal finance, recently wrote in an article for Business Insider.
"Long-term investments shouldn't affect your day-to-day," Sethi said. "Whether you lose $500 or $5,000 — or gain $50,000 or $2 million over time — the important thing is to nail down good personal finance habits so that when your portfolio grows in the future you'd exactly know how to react and can stay strong with your investments for years to come."