10 things millionaires won't tell you.

[Straight Success]

Just add an "s" after the word time and it'll be alright

Awww, didn't even pay attention to the last part. Thanks. I'm an engineer. We can write when we need to, but math comes first. SO, occasionally I'll make a grammar mistake. My bad. Other times, i may not crae.

EDIT: In regards to this thread and people making comments about money status. Behold... , Sike. Hence why I drive a '93 Accord. Beside the fact that I like them, they're money savers on my way to a cool million.

[owequitit]

That statement sums up everything that I just said!



I know saving and smart investing are very important, and practiced by all financially successful people (well, "celebrities" excluded... when you make 7 figures playing sports, music, or acting... you don't necessarily have to be smart... and many lose their riches for that reason)

I'm simply saying that setting aside a small amount each month isn't going to be the singular key to millionairedom. Yes... I made that word up.
At a $12,000 yearly investment (which is more than just about everyone on here can afford now, and for some, never), how long would it take to reach $1,000,000? With no interest yields, it would take 83.33 years of straight saving at that rate to hit a million.
With compounded interest yields, yes, it will accelerate... and considerably, I'd imagine... but how long would it take for JUST that $12,000 yearly investment to reach that level?

Do you want me to calculate it out for you?

[deevergote]

At 6% annual rate, investing $1,000 per month, it'll take 29.94 years to have $1,000,000.

Not bad... but I've already lived 30 years. Another 30 to make a million?
Doable, for sure. But hardly a convincing argument for that to be a singular investment.

[19dabeast85]

Awww, didn't even pay attention to the last part. Thanks. I'm an engineer. We can write when we need to, but math comes first. SO, occasionally I'll make a grammar mistake. My bad. Other times, i may not crae.

Deev you deal in foreclosures right now right? That means you know of plenty of houses for cheap and you know where the highest concentration of people are who are looking for a new home to rent instead of getting back into a mortgage. Since you have a steady income with (I'm assuming) relatively low liabilities, you could get loans and buy a couple cheap houses. Charge $950 per month rent on each house and only have to pay $450 on the loan for that house. That's an extra $1,000 per month passive income and THAT is one way to make money work for you. Of course you have the insurance and taxes to figure in but you get the picture....just have to be creative and willing to make the first move.

[owequitit]

Not bad... but I've already lived 30 years. Another 30 to make a million?
Doable, for sure. But hardly a convincing argument for that to be a singular investment.

Yes, but keep in mind that a more historically correct figure of 8-10%, it will take far less time. Just like paying a few % on your mortgage dramatically shortens it.

Of course, that figure is also not counting any other equities, incomes or assets you may have, such as a house etc.

If you were to start at the age of 18-20, you could EASILY retire a multi-millionaire on far less money per month (about $100), with no other asset considerations. The problem for guys like you is that the most important factor in compound interest is time. That 10 years, cost both of us big. Of course, education is a big investment too, so it is likely that might offset the time if done properly.

The point isn't that it is "easy" to become a millionaire. It is that it takes a lot less time and sacrifice than you would initially believe.

[19dabeast85]

Not bad... but I've already lived 30 years. Another 30 to make a million?
Doable, for sure. But hardly a convincing argument for that to be a singular investment.

Oh yeah, definitely shouldn't be your only income building activity. You also must remember that at 3% annual inflation, $1,000,000 in 30 years will have the value of $412,000 today.

[deevergote]

Deev you deal in foreclosures right now right? That means you know of plenty of houses for cheap and you know where the highest concentration of people are who are looking for a new home to rent instead of getting back into a mortgage. Since you have a steady income with (I'm assuming) relatively low liabilities, you could get loans and buy a couple cheap houses. Charge $950 per month rent on each house and only have to pay $450 on the loan for that house. That's an extra $1,000 per month passive income and THAT is one way to make money work for you. Of course you have the insurance and taxes to figure in but you get the picture....just have to be creative and willing to make the first move.

I've thought about it, believe me!

However, my income is based on the market... inversely, but still based on the market. Right now, I'm doing well. 2 years ago, I was on here begging for job ideas, because I was sinking. 2 years from now, I may be back in that boat! 2 months from now I may be! (well, not really... I have savings now to guard against that... but still...)

Rental properties can be a headache, though. As a landlord, I'd be responsible for all repairs, taxes, etc... not to mention, I would need to ensure that they were occupied, and that the rent was paid (evicting tenants is difficult... and if they won't pay, I'm paying the mortgage out of pocket until I can either evict or collect.) My "boss" owns 3 properties. Lives in one. Rents one for less than the monthly mortgage costs her. The third one, she hired a realtor to rent it, because she couldn't get anyone to rent!

It'd be a good idea if I could be comfortable affording the time and money necessary to handle it when it wasn't going smoothly. I knock on far too many doors that are rental properties to assume that a rental property is a guaranteed source of income!

[Straight Success]

How much do you want to be I can disagree with you?

It doesn't take nearly as much investment and time as you think.

I agree. I've personally seen it done (the ability to acquire over a million net worth that's liquid) without any investments whatsoever. However, investments may help with financial longevity and security. Consequently, they may hurt when it comes time to pay taxes.

These days one must be very knowledgeable how to deal with their finances. It's not hard yet not that easy either. You can hire someone to assist in the process of financial planning and organization, or learn the ropes (as I am doing), and do the work on your own. What ever route one may choose, make sure you are responsible.

[19dabeast85]

Yes, but keep in mind that a more historically correct figure of 8-10%, it will take far less time. Just like paying a few % on your mortgage dramatically shortens it.

Of course, that figure is also not counting any other equities, incomes or assets you may have, such as a house etc.

If you were to start at the age of 18-20, you could EASILY retire a multi-millionaire on far less money per month (about $100), with no other asset considerations. The problem for guys like you is that the most important factor in compound interest is time. That 10 years, cost both of us big. Of course, education is a big investment too, so it is likely that might offset the time if done properly.

The point isn't that it is "easy" to become a millionaire. It is that it takes a lot less time and sacrifice than you would initially believe.

Yeah, I was using an extremely safe rate. Using your 9% growth rate and then factoring a 2.5% inflation rate, in 30 years $1,000/month will net you $872,794 in today's dollar value.

[deevergote]

Yes, but keep in mind that a more historically correct figure of 8-10%, it will take far less time. Just like paying a few % on your mortgage dramatically shortens it.

Of course, that figure is also not counting any other equities, incomes or assets you may have, such as a house etc.

If you were to start at the age of 18-20, you could EASILY retire a multi-millionaire on far less money per month (about $100), with no other asset considerations. The problem for guys like you is that the most important factor in compound interest is time. That 10 years, cost both of us big. Of course, education is a big investment too, so it is likely that might offset the time if done properly.

The point isn't that it is "easy" to become a millionaire. It is that it takes a lot less time and sacrifice than you would initially believe.

Absolutely.
I'm not arguing that investing is a bad idea... and you're right, it really does pay off over time. My argument is that it just shouldn't be the only consideration. The secure, low-risk investments should be the cornerstone of your financial profile, but not the entirety of it.

I know you're not really arguing against that... Merely pointing out that while it's a very wise thing to do, other things should be considered at the same time.

Oh yeah, definitely shouldn't be your only income building activity. You also must remember that at 3% annual inflation, $1,000,000 in 30 years will have the value of $412,000 today.

Absolutely.

With the world economy shifting as much as it is now, the American dollar may also drop considerably in value.

[19dabeast85]

With the world economy shifting as much as it is now, the American dollar may also drop considerably in value.

Which goes back to my earlier point of investing in companies who have a strong presence in the emerging economies (China, India, Korea, Russia).

[Straight Success]

I've thought about it, believe me!

Rental properties can be a headache, though. As a landlord, I'd be responsible for all repairs, taxes, etc... not to mention, I would need to ensure that they were occupied, and that the rent was paid (evicting tenants is difficult... and if they won't pay, I'm paying the mortgage out of pocket until I can either evict or collect.) My "boss" owns 3 properties. Lives in one. Rents one for less than the monthly mortgage costs her. The third one, she hired a realtor to rent it, because she couldn't get anyone to rent!

It'd be a good idea if I could be comfortable affording the time and money necessary to handle it when it wasn't going smoothly. I knock on far too many doors that are rental properties to assume that a rental property is a guaranteed source of income!

Hire someone to do it for you. I learned that from my grandmother. I know it's easier said than done, but very doable. A good way to have rapid financial growth through real estate is look at the gentrification areas. Buy a vacant house or empty shell for cheap, fix it up (realistically let's say a year and a half time frame), pay the taxes on it, and flip it.

[deevergote]

Which goes back to my earlier point of investing in companies who have a strong presence in the emerging economies (China, India, Korea, Russia).

Very true. Investing in the companies of those countries might be a bad idea (many of China's automakers are facing serious issues getting out of China... safety standards in most countries that would prove to be ripe markets are far too strict for their designs, and many of their designs are borderline copyright infringements, which would make for some serious difficulties when it comes to international sales). Investing in companies like GM could be wise... Buick is very popular in China, so as that country evolves, the growth of the Buick brand there will likely go with it.

Hire someone to do it for you. I learned that from my grandmother. I know it's easier said than done, but very doable. A good way to have rapid financial growth through real estate is look at the gentrification areas. Buy a vacant house or empty shell for cheap, fix it up (realistically let's say a year and a half time frame), pay the taxes on it, and flip it.

That would only work if you could ensure that you can handle the expense of buying it, fixing it, and owning it until it sold (renting it helps... but as I said before, that's a whole new can of worms).

I can picture at least half a dozen houses in my area that are either new constructions or renovation projects that were halted mid-project... One of them is for sale. No siding. Tar paper on the exterior walls. New window labels still on every window. It's been for sale for 3 years in that same unfinished condition. Some builder or investor bit off more than he could chew, and now this house that, when completed, SHOULD be worth perhaps $300,000 (in an area where most values are around $220,000) is rotting away.

[Straight Success]

That would only work if you could ensure that you can handle the expense of buying it, fixing it, and owning it until it sold (renting it helps... but as I said before, that's a whole new can of worms).

I can picture at least half a dozen houses in my area that are either new constructions or renovation projects that were halted mid-project... One of them is for sale. No siding. Tar paper on the exterior walls. New window labels still on every window. It's been for sale for 3 years in that same unfinished condition. Some builder or investor bit off more than he could chew, and now this house that, when completed, SHOULD be worth perhaps $300,000 (in an area where most values are around $220,000) is rotting away.

Very good point. It's a gamble alright. My notion is start small, very small and work your way up.

Luckily I have people who can show me how to invest, put some more up for my son that's tax deductible, and stash the rest. Now that I think about it, I'm fortunate to have or have had people in my life to teach me about saving, investments, and money management. I'm always learning as well.

[Accord R33]

The problem I have is that I'm not satisfied with waiting until i'm in my 50s, 60s and older to be a millionaire, and don't understand why so many people seem to be complacent with that.

I'm aiming for somewhere around 30 years old, if not sooner. I rather have my exotic cars while I can physically enjoy driving them to their full potential. I rather hit the race track every weekend while i'm in peak physical condition.

That's not to say I don't have retirement goals in mind either, just like anyone else I have plans for a healthy retirement portfolio, but to hit that "millionare" status by age 30, you need to do more. Multiple streams of income are the key to wealth and happiness people, i'm telling you. You also need to work for yourself, even if it's in addition to working "for" someone. You'll never achieve real wealth in a reasonable amount of time by working to make someone else rich. When you work for yourself, the only limit is how hard you're willing to work.