OK, OK. I didn't mean you shouldn't get married. If you've found the love of your life, by all means, go right ahead. But don't spend gobs of greenbacks on the wedding.
I recently read that the average wedding in America these days costs around $28,000. That's more than half of what many millions of Americans earn each year. And that's just the average. So plenty of folks are spending $40,000, or even $50,000 or more, on weddings.
So here I am with a proposal for you: Cancel that wedding you have planned. Instead, have a different, less expensive one. Here's why: If you spend, say, $8,000, on the wedding and invest the $20,000 or $30,000 that you opt not to spend on it, you'll likely thank yourself later. Remember, the wedding is just one day (I know, it's a big one). But that investment can give you many happier golden years.
Run the numbers
Consider this. Imagine diverting $25,000 from your wedding into stocks like 3M (NYSE: MMM), Costco (Nasdaq: COST), and Paychex (Nasdaq: PAYX). Those are just a few of the companies you'll own when you buy shares of an S&P 500 index fund. If you earn the market's average annual long-term return of around 10%, your $25,000 will grow as follows:
|
Time
|
Amount
|
| 10 years |
$65,000 |
|
20 years
|
$168,000
|
|
30 years
|
$436,000
|
|
40 years
|
$1.1 million
|
If you're getting married at age 30, you can hit age 70 with a big nest egg. I've learned, via the Fool's Rule Your Retirement service, that in order to make it last, you should conservatively plan to withdraw about 4% per year in retirement. With $1.1 million, that amounts to a generous $44,000 annual payout. (Yes, inflation will make that worth considerably less, but still, it will likely be a huge help in retirement.) For more retirement advice, I encourage you to take advantage of a free trial of our Rule Your Retirement newsletter.
And remember that by investing in some carefully selected mutual funds, you may be able to earn even more than 10%, on average.
How to do it
Here are some ideas on how you can get away with spending a lot less than you planned on your wedding:
Follow along with the Global Gains team as they travel to key business centers in China to uncover the very best investing opportunities! Sign up here to receive their FREE dispatches from the road.
Terms & Conditions
RSS Headlines
Fool UK