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We are still working on it. Still it is very possible for those that plan ahead. The thing is to make it a priority over other things in your life. Don't buy the new car. Don't eat out all the time. Keep things longer and get as much use out of them. Fund your retirement account. First thing is to invest all you can to get to the maximum your employer will match. That is just free money. After that you can either switch to a IRA or a Roth IRA. The max investment is $5,500 for all IRA's combined. Then you can go back to funding your 401K or 403B. The max investment there is $17,500 for 2013. If you are married both partners should invest the max. Over time you can build your accounts up over time by using your yearly increases.
I would say that most people should work on doing just the above. Start early and over time you will acquire a 7 figure retirement account.
Although you can make money over time many others have made it by building their own brand. Start a business of your own and create wealth that way. Most of the people that I know that are in the 7, 8, and 9 figure club started their own business.
It is entirely possible as long as you find a career that pays very high... lot of people are content to do what they do and then expecting pay beyond what they do... for instance, flipping burgers for $15/hour... you are not going to be rich with that mentality... and with wealth comes risk, not everyone is going to make it but a few do by taking risk... a CD earning 1% interest is pretty pathetic when the stock market makes 20% interest in a shorter amount of period but you could lose money by making the wrong bets... take chances, think outside the box, keep a mental discipline, be ready for disasters, and find something that you can do well and develop a market strategy...
I agreed with virtually everything in The Millionaire Mind. For most people, there is going to be a stage where you are denying yourself a lot of things (cars, vacations, etc) in order to build wealth.
The biggest thing that I didn't think was emphasized enough in the book is that one really needs a pretty high income to invest the amounts required to become a millionaire. The lower your income goes, subsistence consumes a higher percentage of income to maintain basic needs than a higher income person, and the harder it is to invest, avoid debt, etc. Looking back at my life, the most critical advice I could give anyone is to get your income as high as possible, as early as possible. Frugality is key, but frugality without income is not that helpful.
The biggest thing that I didn't think was emphasized enough in the book is that one really needs a pretty high income to invest the amounts required to become a millionaire. The lower your income goes, subsistence consumes a higher percentage of income to maintain basic needs than a higher income person, and the harder it is to invest, avoid debt, etc. Looking back at my life, the most critical advice I could give anyone is to get your income as high as possible, as early as possible. Frugality is key, but frugality without income is not that helpful.
It's always a tricky thing. Most people emphasize getting more income but then as soon as they get it, they go out and spend it. But it's true, if you earn a low income, you probably really do need to earn more. But the point is...you must save something, and you must save regularly, even if it is a small amount. The habit is very important.
I think once you start hitting an average income in the $40,000 range, it becomes possible to hit $1M if you are a diligent saver and start young. The problem is, most people don't start young and are not diligent savers. Not having kids also helps, although I know plenty of people who don't have kids who earned decent incomes but who are broke...so that is no guarantee.
A close relative parlayed her business into a successful enterprise for several years. I don't know how much their bank account grew, but they bought several new cars and nice homes with lovely grounds. It lasted several years, but, they lost it. Their home is in foreclosure. I think the massive amount of profits caused them to think it would never end. They are an example of young people lucking into good fortune and spending it too quickly, without regard for longevity.
I didn't watch the spending end as much as i did the investing end.
As i say over and over a penny saved is a penny earned but it is still only a penny.
It is the power of capital gains on those pennies that really count.
I see far to many folks live like dumpster divers to save a penny but then their own fear of losing that penny prevents them from ever growing it.
It is like they form goups and read books to learn new ways of frugelness but no book about learning how to invest it ever touches their hands.
i have yet to see one of these frugal folks join any of the investment clubs i ever belonged to.
it amounts to as they say penny wise and dollar foolish.
they could have spent more and enjoyed more things in life without penny pinching if they spent their time learning to invest it vs pinching it..
next i would forget abou 90% of these how to be a millionaire books and read jason zweigs your money your brain.
understand that when you have real money committed to things you use different logic and even different parts of your brain then you do running through hypothetical situations.
your brain will kill every investment idea it sees as risky even if it is not that risky.
your brain comes pre-programmed and hates losing money more than making it.
once you understand your brain is your own enemy when it comes to growing wealth you can deal with it better.
i borrowed 500k to buy a partnership in a real estate company and had i let my brain dictate what i did i would never have done it, ever.
but i understood my brain would throw every negative outcome and what if at me and while i took it into consideration i knew i was not being handed rational even handed judgement from my brain after reading jasons book earlier.
Last edited by mathjak107; 12-23-2013 at 01:58 PM..
I know some people they work in flea market. they don't do illegal stuff but recently bought high end SUV's on cash. I have seen them grow in period of less than 10 years.
I guess its luck and hard work together.
neither alone can get you in 7 figures.
I didn't watch the spending end as much as i did the investing end.
As i say over and over a penny saved is a penny earned but it is still only a penny.
It is the power of capital gains on those pennies that really count..
I totally agree with you on this.
And the thing is, you don't need to go crazy with risk. You can take a modest amount, such as with those target date retirement funds or balanced funds...you know the ones I always recommend (T. Rowe Price Capital Appreciation, Vanguard Wellington, Dodge & Cox Balanced, Mairs & Power Balanced, et al).
I know you are more of an active investor, but I think we both agree that a balanced or target dated mutual fund is a better place for your long term savings than bank CDs and stable value funds.
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