10 things millionaires won't tell you.

[Tnwagn]

If you can afford to buy a Ferrari or Lamborghini you can afford the upkeep costs

By the way, being rich isn't all about having Ferraris and going on private cruises. The stability that the wealthy provides is the best part of being wealthy. You can spend more time enjoying life rather than figuring out how you're going to pay off your $50,000 home or whether you can afford to go out to dinner every Friday night.

As to the point gloryaccordy made about never feeling rich enough, I don't think that would be a problem for me. I have a pretty good idea of the lifestyle I want to lead when I'm grown up and I don't think I'll care if I clear $30,000 a year or $200,000. Once you reach a certain point, the money doesn't matter for anything more than helping out others, like your kids.

[deevergote]

I can live on about $30,000 a year right now. I wouldn't be buying anything extra, but I'd be paying the bills

If I could somehow make $2,000,000 and stick it in the bank, earning 3% interest... I could quite comfortably after taxes were taken out of that interest income each year.


Having a million dollars really isn't all that rare now, as it was said in the article.

[gloryaccordy]

If you can afford to buy a Ferrari or Lamborghini you can afford the upkeep costs

By the way, being rich isn't all about having Ferraris and going on private cruises. The stability that the wealthy provides is the best part of being wealthy. You can spend more time enjoying life rather than figuring out how you're going to pay off your $50,000 home or whether you can afford to go out to dinner every Friday night.

As to the point gloryaccordy made about never feeling rich enough, I don't think that would be a problem for me. I have a pretty good idea of the lifestyle I want to lead when I'm grown up and I don't think I'll care if I clear $30,000 a year or $200,000. Once you reach a certain point, the money doesn't matter for anything more than helping out others, like your kids.

Yea I guess it depends on the lifestyle you lead. I went to private school and live in NYC so I have always been exposed to the rich. If I got rich I would probably have to leave NYC to stay rich

And as far as saying "no thanks on letting me use the lambo, i have a honda accord!"

[Rusty]

Nice article scott.

While being a millionaire still sounds amazing it's really nothing extraordinary these days. Of course, if you are used to an hourly salary you're rarely going to experience that level of wealth. However, salary workers making well over $100,000 (which aren't rare) can look forward to becoming millionaires easily so long as they don't waste their money.

Hell, I see myself becoming a millionaire. Might sound a little snoody, but I work my ass off and I expect to get a job that recognizes my skill with a good salary.

Not wasting money is the key. I know so many people who have the potential to truly be rich but they go out and buy ridiculously expensive cars, designer this and that, and go out spending money every weekend. And I often tell them that they don't have their priorities set straight.

I have a friend who's 22/23 who is a service writer at like a kia dealership and he's out looking for a lotus elise. At home he's got a built civic hatch, a DSM, an older bike, and an S2k. BTW... home is with his parents. I'm not knocking living with your parents b/c if it wasn't for Eric I would be in the same situation. But I would rather have my own place than have a lotus and live with my parents.
Him and I were doing the math.... his monthly payment for the Lotus would be more than the insurance and car payments for all 3 cars that eric and I own (granted 2 of our cars are paid off)

People like this drive me insane.

And I dont' think it's snoody to say you're going to be a millionaire. I know I'll be one too. I wouldn't be surprised if i was a millionaire before I was 30 (I'm 24 now)

And when I am a millionaire... I'll still do my own oil changes and buy my designer shoes/bags second hand from a friend who needs to sell them so she can make her car payment.

[deevergote]

That's exactly it.


Also, the more money you can save and invest, the more money it will end up making you. It might take me YEARS to work my ass off to save 2 million. But if I save 2 million, I can live off of the interest alone. If I'm living off of the interest on that 2 million, then I can begin investing in higher risk, higher yield investments without risking my own security. I can push that 2 million to 3 million much more quickly.

It's far easier to make money once you actually HAVE money.

[Rusty]

oh yeah... every "adventure" takes capital. And like the article said... many of those millionaires had to invest good chunks of money.

on that same note... eric's been looking to invest some money and it's stressing us out b/c we just don't know how much to invest, where to invest and if it's responsible b/c I don't have any real income right now.

[deevergote]

oh yeah... every "adventure" takes capital. And like the article said... many of those millionaires had to invest good chunks of money.

on that same note... eric's been looking to invest some money and it's stressing us out b/c we just don't know how much to invest, where to invest and if it's responsible b/c I don't have any real income right now.

Invest only what you can afford to lose, and invest it safely and securely. The yield will be low, but the risk will be low as well.

[HondaB18]

screw being a millionaire, who wants to be one anyways

[19dabeast85]

oh yeah... every "adventure" takes capital. And like the article said... many of those millionaires had to invest good chunks of money.

on that same note... eric's been looking to invest some money and it's stressing us out b/c we just don't know how much to invest, where to invest and if it's responsible b/c I don't have any real income right now.

Free investment tip for those reading: Many will tell you that in a volatile economy, government bonds are the safest investment, however if you think about the fact that our government will NEVER allow the BIG banks to go under then big bank bonds are really just as safe as government bonds but return a much higher rate.

Secondly, the American economy has hit the end of a 60 year high growth spurt which made many people rich. America will not be the same in the future, our growth over the next 10-20 years is going to be extremely slow which means most American investments will return low yields. Look at the major emerging economies which have the same living standards as 1920's-1940's America (China, Korea, Russia) and think about what their growth is going to look like in the near future. Research for big multinational corporations and large energy providers in those countries. Those will be returning very high yields as their economies demand products and services from them during the next 40 years of massive growth.

You become a millionaire by making money when other people work (owning a business). There are so many different business opportunities even today that almost anyone with some creativity and determination can be successful. If I had the capital I'd be pouring my money into real estate. Real estate is on clearance right now, if you have the funds take advantage of it! But there are so many other business opportunities out there. I myself believe quality multi-level marketing is the wave of the future and I plan on being a millionaire in 5-6 years. And being a millionaire should be based on your cash flow, not total value.

[deevergote]

The best way to gain wealth is to have multiple sources of income. Ideally, let your money work for you.

Val, Eric's websites are an ideal start for that. I need to get off my ass and take a lesson from him!

If you can set up 20 low-maintenance sources of income that bring in even $500 a year, that's $10,000 a year combined. In one year, you can take that $10,000 and invest it in something that will make more money.

[Tnwagn]

And being a millionaire should be based on your cash flow, not total value.

Definitely

As to investments, I've never been one to try and play the market (besides the stock market game in 3rd grade, but that doesn't really count ). I find it disconcerting to think that my money depends on how a bunch of guys in a small room yell at each other. Mutual Funds are my only investments so far, very safe but very low return. I also have a number of savings bonds that have been maturing for anywhere between 20-5 years. Once the last one fully matures they are going directly into a separate, more risky mutual fund in order to cash in while stocks are still pretty cheap.

[owequitit]

Free investment tip for those reading: Many will tell you that in a volatile economy, government bonds are the safest investment, however if you think about the fact that our government will NEVER allow the BIG banks to go under then big bank bonds are really just as safe as government bonds but return a much higher rate.

Secondly, the American economy has hit the end of a 60 year high growth spurt which made many people rich. America will not be the same in the future, our growth over the next 10-20 years is going to be extremely slow which means most American investments will return low yields. Look at the major emerging economies which have the same living standards as 1920's-1940's America (China, Korea, Russia) and think about what their growth is going to look like in the near future. Research for big multinational corporations and large energy providers in those countries. Those will be returning very high yields as their economies demand products and services from them during the next 40 years of massive growth.

You become a millionaire by making money when other people work (owning a business). There are so many different business opportunities even today that almost anyone with some creativity and determination can be successful. If I had the capital I'd be pouring my money into real estate. Real estate is on clearance right now, if you have the funds take advantage of it! But there are so many other business opportunities out there. I myself believe quality multi-level marketing is the wave of the future and I plan on being a millionaire in 5-6 years. And being a millionaire should be based on your cash flow, not total value.

I disagree with this. Most of it anyway.

Bonds have definite advantages and disadvantages. However, bank bonds are still not as secure as Federal Bonds. Some banks did in fact have their bonds become worthless.

The key is not to have a particular instrument of investment, the key is to have a diversified and hedged portfolio that allows for sustainable and healthy growth long term. That will be a mix of investments. There are many companies that have stock that is currently a steal, but you have to know what you are looking for. The other advantage to buying stocks right now is that the prices are low, and thus you get more for your money, which if you are prudent when choosing, can lead to monumental gains in the future. But yes, there is more risk. However, with the status of the Federal Debt and the current level of deficits, there is the possibility that bonds will become less safe in the not too distant future as well.

Also, we are not at the end of a 60 year growth spurt. There have been many recessions in the last 60 years, they just haven't been this severe because they were driven by such high levels of stupidity in fundamentally important markets, such as housing. The economy will surely be different than it has been in the past, but then again it always is after a recession or major economic revolution. That isn't necessarily a bad thing, and it doesn't necessarily mean that it won't come back. There are no problems that currently exist that can't be fixed. Whether or not the American people want to make the choices necessary to fix them is another matter entirely, but it is solvable from a pure possibility standpoint.

Also, if you read the article, you would see that majority of millionaires did not actually own their own business to get to that position. The part of that equation that you are neglecting is that over 70% of all businesses started fail. While that is certainly no reason to not try, it is something that must be considered. Plus, the complexities of running a business and actually making it succeed are a lot more than most people realize.

The KEY to retiring wealthy is to make your money work for you. Essentially, if you aren't making steps to actually GROW your money, then you are not going to end up ahead. The rich get richer and the poor get poorer because the rich make their money work for them, rather than the other way around.

There are litterally hundreds of different strategies that people can do to improve their quality of life and financial standing from recycling stuff to save on purchase costs, to having dedicated investment instruments. The problem is that not enough people understand the concept of opportunity cost and what it means. It means that for every choice you make, you give up the ability to make another choice. If you spend $20 on storage baggies that you could have recycled, that is $20 you can't spend on something else. If you spend $20 on a 12 pack of beer, that is $20 you can't put in an interest bearing retirement account. Whether or not the beer is more important, is up to the individual. But, it is imperative that they understand that relationship, and further, that they understand that the consequences of such a decision are nobody's but their own.

The biggest failure IMO, of our society has been a total failure to educate children about the importance of financial planning, and how to make this stuff work. Instead, we are worried about who has the hottest Reeboks of the season, and what we need to do to keep up with the Joneses.

In response to Glory's comment about not being "rich enough." If you look at it purely from a monetary standpoint, there is no such thing as "rich enough." However, if you approach life with the attitude that you are going to make yourself happy, instead of everyone else, then keeping up with the Joneses becomes much less of a priority. In doing so, it becomes clear that the way to truely be happy it to cultivate a financial enviroment that will allow you to pursue those things which you want to do, with enough margin to weather the inevitable downturn.

For instance, I want to road race, and learn to fly aerobatics. Other than my flying related hobbies, there is nothing so extravagantly expensive that I need an ever increasing income to support that. I do like to travel, but eventually, if I own my own plane and know how to fly it, or get a job that allows me to travel, then I don't need as much money to make it happen. Plus, there are always ways to do things frugally.

[deevergote]

You also have to factor in other things... Money isn't all that makes one "rich".
I could have all the money in the world, but if I had no time to enjoy it, no friends to enjoy it with, no family in my huge home... no passions in my life other than making that number get larger... then it's pretty meaningless.

When I was working 3 days a week, making half of what I'm making now, I was actually happier. I was "richer".

I know that's taking it in a totally different direction than the actual intent of this thread, though...

[Straight Success]

You could be next.

[deevergote]

Becoming a millionaire isn't all that hard. I know I could probably do it, as long as I remained focused. Or, rather, GOT focused... because I can't stay focused long enough to string together a coherent sentence, let alone plan and execute a long-term financial plan.