In 2010, Chris Reining committed to becoming financially independent. He set the goal of building a $1 million portfolio by age 35, cut back on his expenses and started aggressively socking away money. He worked his way up to saving more than half his income, reached the $1 million mark at 35, as planned, and officially retired in 2016 at age 37.
Say you decide to earmark $100 each month. If you let it sit in a standard savings account that offers an interest rate of 0.01 percent, it'll grow to about $36,000 over 30 years. If you put it in a high-yield savings account that offers 1 percent, it'll amount to about $42,000 over 30 years.
But if you invest your $100 every month and assume a 7 percent rate of return, it will grow to more than $120,000 over 30 years.
As Reining puts it: "The difference between 1 percent and 7 percent can change your life, and that's why investing is so important."
"If you want financial freedom," he continues, "it's not about working harder, or smarter or longer. It's about making the shift from working for money to having your money work for you, and you can't do that by saving. You have to invest."