What are you gong to do with the money from extra benefits?

 

The COVID-19 pandemic created many obstacles, but at the same time, created many opportunities. One of these opportunities is lack of labor force, especially, in the USA. In order to retain old workers or find new ones, many companies are giving some extra benefits. One of the benefits is eliminating the pension plan matching contributon done by workers. Under the new arrangement, the company will pay all. That means that what you used to pay for your private pension plan will remain with you. On the other front, other companies are giving paid vacation to their employees while others add bereavement allowance to that. This means that you are making extra money than before. Now, the question is: what are you going to do with this extra cash? Will you go on a spending spree, change your car, live in a bigger house, or increase your emergency fund and invest the rest? You might justify yourself arguing that the amount involved is just too small. Let's see how much it is. Imagine a 5% extra cash on a salary of $5,000 a month. That gives you an extra cash of $250. Now, here is the magic. If you invest R$250 every month for the period of 40 years in a mutual fund or ETF with annual return of 10%, you will retire with about $1.8 m. If you increase the amount to $500 every month, you will retire with about $3.5 m. If you are lucky to have a 12% annual return, your money will grow to $6.5 m. You can do these calculations by youself and see if they are true or false. So, this is an opportunity you have been waiting for to start investing. In order to have a successful career, you need to know how to invest. Stop complaining about your company or the management. You can provide yourself with the financial freedom you deserve.