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May the Fourth Be When You Claim Your Millionaire Retirement

By Chuck Saletta - Updated May 4, 2021 at 10:38AM

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Take advantage of Star Wars Day to put the Force of Compounding to work for you.

If you want to retire a millionaire, the Star Wars saga can provide a surprising amount of useful guidance. In honor of this Star Wars Day (May the Fourth, get it?), take this opportunity to learn some investing wisdom so valuable that it has survived the journey from a long time ago and a galaxy far, far away. 

With some wisdom passed down through the ages, you can find yourself on the path toward the light side of personal finance, and well on your way to a financially comfortable retirement. With that in mind, May the Fourth be with you when you claim your millionaire retirement. 

A man with a lightsaber.

Image source: Getty Images

Do. Or do not. There is no try. 

Yoda's guidance to Luke Skywalker as the great master starts training his apprentice on Dagobah fits in incredibly well when it comes to investing successfully. There are numerous paths to successful investing, but they all have one simple set of steps in common:

  • Spend less than you earn
  • Invest the rest
  • Repeat

If you combine those steps with a reasonably good investing strategy over a long enough period of time, amassing a decent pot of money in the market becomes a pretty straightforward task. On the flip side, not taking those steps is a surefire way of ending up with nothing by the time you retire. The difference is as clear and stark as Yoda's "Do. Or do not. There is no try." So take the simple steps needed to get yourself able to invest. It is the difference-maker when it comes to retiring a millionaire.

He is too old. Yes. Too old to begin the training. 

In the traditional Jedi training program, children are generally chosen to participate. Luke was already a young adult by the time he began to study under the great master. That made it harder for Luke to get to where he needed to be since he had to "unlearn what he had learned" earlier in his life.

While you're never too old to begin investing, as it was for Luke in his training, the path to successful investing does get tougher the older you get started with it. First of all, the earlier you start, the less you have to invest each month to arrive at the same place by the time you retire. That's because the longer your timeframe for investing, the stronger a role compounding can play in building your wealth. That compounding can truly become a strong Force for good on your path to a comfortable retirement.

In addition, costs have a way of creeping into your lifestyle to consume all your available salary (and then some, potentially). That's a key reason so many pro athletes wind up broke shortly after retiring from the league, even though they will likely earn more in a few years than most of us will over our entire working careers. The more costs you have to support, the harder it is to come up with the money to invest, and that holds true whether you're making a typical wage or an all-star pro athlete's salary.

Making a commitment to start early helps you prioritize your investments ahead of other (nonessential) expenses that may come up. The reality is that most costs are easier to avoid in the first place than to figure out how to cut once you start them. That adds to the benefits that starting investing early provides you by giving you a reason to not add costs to your everyday lifestyle.

Great, kid. Don't get cocky. 

Han Solo's coaching to Luke as they're knocking out Imperial Tie fighters from the Millennium Falcon is incredibly important advice for investors as well. The stock market can get incredibly volatile, with that volatility capable of moving stocks either up or down. If you buy a stock and it then goes up, you can start to think you're a really good investor just because you made money.

In reality, while you could be a world-class investor, you also could have just gotten really lucky. It's incredibly important to recognize that reality because when you mistake luck for skill, bad things can happen when that luck runs out.

So what can you do about it? Well, first, base your investing around a solid strategy -- one with a decent track record of success over time. Let the guidelines of that strategy help drive your buy and sell decisions. Second, recognize that the stocks you buy represent ownership stakes in the companies whose shares you're buying. Over the long haul, your investing success will be tied to those companies' abilities to grow and profit.

Combining those two factors will help you get a better feel for how to intelligently assess your investments and make data-based decisions on what to buy, sell, and hold. You still won't get it correct 100% of the time -- no investor does -- but you can build the skills to be less reliant on luck to earn reasonable returns over time.

Use the Force (of compounding) as your tool as you chart your path forward

As you build your retirement plan, remember that compounding is the most powerful force you can bring to bear on your quest to reach millionaire status. So take advantage of today being Star Wars Day to bring the Force of compounding into your life and set it to work for you. The sooner you get started, the better your chances of long-term success. May the Fourth be with you as the day you began your journey to a millionaire retirement.

Chuck Saletta has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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