The Key is Discipline and Consistency

Remember the story of "The Tortoise and the Hare"? This fable, attributed to the ancient Greek writer Aesop, tells the story of a running contest between one of the slowest animals and one of the fastest.¹ The race should be a no contest. Yet because the course is over a long distance, the overconfident hare takes a nap mid-race. When he wakes up, he sprints to the finish line only to learn that the tortoise has beat him.

A lesson that we can draw from this 2,600-year-old story is that consistency is the key to winning a long race. It's not how you start. It's how you never let up.

Saving for retirement is such a contest. Your best chance of achieving your goal requires consistent saving and investing over decades. And a recent study of people who are successfully meeting their retirement goals has found that consistency is a more significant factor than income level.²

The survey, conducted by Principal Financial Group looked specifically at middle-income earners—people who don't have a lot of extra money after the bills are paid. The study found that 80% of this group are actively saving for retirement. And even more remarkable, the typical saver is putting away 8% of their salary.

Financial columnist Jean Chatzky commented on the survey results, pointing out that 8% is more than an employer match.

So how do people who are not high income earners manage to out save those with higher salaries? By tracking where their money goes. Before you can have a consistent savings plan, you have to have a consistent spending plan. You start by simply tracking where your money is spent each month. (You can use a simple spreadsheet or one of the easy budget tracking apps.) Then you can identify those areas where you are spending needlessly or without thinking.

Running your income through a budget means saying goodbye to the stress of wondering if you'll be able to pay for upcoming expenses and unforeseen emergencies. And most people find that they have more money to save for the long-term.

The key is discipline and consistency. Plodding along like the tortoise without stopping. Month in and month out, year in and year out, you can accumulate more of a nest egg than if you try to play catch-up with the occasional lump sum.

As your advisors, we are here to help you succeed regardless of your income level. Partnering with you on the two most important factors for success (having a unique plan and consistently sticking to it), we work together toward your goal of a fully funded retirement.

 

1. http://go.pardot.com/e/91522/wiki-The-Tortoise-and-the-Hare/96zjyd/2955041063/h/3WrtLyrMKOdJSx5lN7NZ80Pu808Nb7nVxoaVcUNzTto
2. http://go.pardot.com/e/91522/ally-succeeding-205906682-html/96zjyh/2955041063/h/3WrtLyrMKOdJSx5lN7NZ80Pu808Nb7nVxoaVcUNzTto