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Man Who Interviewed 177 Self-Made Millionaires Reveals Saving Tip They All Shared

Man Who Interviewed 177 Self-Made Millionaires Reveals Saving Tip They All Shared

Tom Corley has interviewed 177 self-made millionaires and says there's a common theme

Dominic Smithers

Dominic Smithers

A man who has interviewed 177 self-made millionaires has revealed the one saving habit that almost all of them shared.

Thomas C. Corley has spent years talking to wealthy entrepreneurs and written numerous books on tips to the top.

But while their interests and businesses may vary, in their pre-millionaire days he says that 80 percent of them did one thing that stood them in good stead for the future.

Corley wrote: "The self-made millionaires in my study all set a goal of saving 10 to 20 percent of their income during their pre-millionaire years."

According to the St. Louis Federal Reserve, in the US, the average amount saved by workers is about eight percent.

Similarly, in the UK, Brits save around 8.21 percent each month, while a third have less than £600 in savings and one in nine people have no savings at all.

Tom Corley

If you want to follow in the footsteps of the people Corley has interviewed, though, it's not too late.

Research conducted by financial services company AJ Bell shows that a 22-year-old would need to save just £18 per week, or £78 per month, in order to become a millionaire by the age of 65.

How is this possible? By utilising the power of regular savings and compound interests.

Investors should take advantage of a Lifetime ISA, as it offers a whopping government bonus of 25 percent each year.

After the annual £4,000 Lifetime ISA allowance has reached its limits, investors should then use the tax efficient stocks and switch to regular ISA accounts to make interest on their savings.

The older you get, the more you have to invest if you want to reach millionaire status by 65. For example, a 25-year-old would need to save £105 per month, a 30-year-old would need to save £174 a month, and so on (check out AJ's graph for exact figures).

AJ Bell

Laura Suter of AJ Bell told The Telegraph that if you start saving and investing young, you could benefit from compound growth as the years go on.

She said: "This is when your savings grow each year and then in future years you get growth on that growth. As the example shows, the later you leave it the amount you need to start saving quickly ratchets up.

"Investing in the stock market does involve taking risk, but over the long term shares have delivered very strong investment returns compared to other types of investment.

"One of the most valuable things millennials have on their side is time. This enables them to take a very long-term view and know that they can sit tight when things get a bit bumpy and ride out any short-term market volatility."

When it comes to ISAs, Laura pointed out the beauty is that the money is there in the account - there is no tax to pay so it's a simple way to save long-term. And it will grow faster if you increase your contributions as your earnings grow.

"The money can be accessed at any time should you need it," she said, "but if you can leave it untouched and be patient it is possible to turn yourself into an ISA millionaire."

Featured Image Credit: PA

Topics: World News, UK News, Business, Money, US News